European market
Despite of a lower Eurodollar that is now clearly dealing below 1.11, Euronext prices have increased losses by the end of yesterday. The wheat and the corn lost -2 €/t on nearby deliveries. The tracking of port shipments is showing that barley and soft wheat will be sent to China. The volume of shipments toward Algeria remain important for our origins and 150 000 t will be loaded at this beginning of the second part of August. The good quality of the 2019’s French crop will be able to match most of importers specifications.
Corn prices have dropped again and the November 2019’s contract is now dealing at 165.25 €/t, under the levels seen on May 13. Traded volumes were limited. The outlook to see large imports of corn in Europe are still weighing on the market despite of the poor estimations of the 2019’s crop in France.
American market
Corn prices were in little evolution yesterday and stabilized on the lower levels reached by the end of last week. Prices of the December 2019 contract are now on the lowest level seen this year in Chicago. First echoes from the Pro Farmer Midwest Crop Tour are disappointing after having visited the north of Ohio and the South Dakota. The potential is respectively seen at -6 and -11% below the level of last year. These elements are supportive for the market and are reinforcing the doubts issued from the conclusions of last week USDA’s statement. The US Ag Minister reported higher yields while only 56% of the crops are currently considered in good to excellent conditions.
For the soybean, the crop rating is one point below last week with 53% of crops judged in good to excellent conditions. Prices have managed to stabilize just above the technical support of 8.65 $/b on the November 2019’s delivery.
In the context of lower wheat prices, Morocco has announced a tender for US origins as part of the preferential rate import quota. Volumes announced are 576 000 t of soft wheat and 345 455 t of durum wheat.
Black Sea market
To estimate the next corn production in Ukraine, Agritel’s team has started a crop tour yesterday. During all the week, the crop conditions will be watched. This year, the corn acreage has increased to 4.97 M ha vs 4.57 M ha last year. The largest gains are recorded in the North oblasts of Chernigov, Kiev, Poltava, Cherkassy, Vinnitsa and Soumy, regions where the best yields are also displayed.
No doubt that Ukrainian farmers know how to adapt the crop rotation. They draw lessons from the conditions met in 2018 when the production touched a record high of 36 Mt with an average yield of 7.8 t/ha. In 2019, the production should be close to this level, but if a similar yield as 2018 is applied, the production could touch 39 Mt!
Is this number possible to reach? This will be assessed by our crop tour team during this week.
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