European market

Cereals took a break yesterday but maintained their upward trend. The most noteworthy element at the beginning of the day is the clear progression of the euro against the dollar, posted at 1.1850. Crude oil is showing a slight decline, a consequence of a rise in weekly stocks in the USA.

In terms of balance sheets, the world corn balance sheets have the most adjustments. Agritel analysts have already been warning for several weeks about corn production in Ukraine, which has been revised downwards compared with last spring's estimates.

On the international scene, the USA sold yesterday 132,000 t of soybeans to undisclosed destinations. South Korea bought around 130,000 t of feed wheat. Today operators will wait for Algeria's tender offers.

In Australia, the rains are abundant in the south-east of the continent, but in the other important wheat-producing region, on the south-west, the lack of rainfall is leading to a downward revision of production estimates. The USDA in its last report showed a production estimate of 28.5 Mt.

Rapeseed prices benefited yesterday from firm palm, canola and soybean prices. Nevertheless, the resistance of 395 €/t on Euronext is difficult to break, despite tense European balance sheets. Malaysia lacks the manpower to harvest palm crops properly as a result of the covid crisis.

American market

Prices showed a new increase on all products yesterday in Chicago. The water deficit combined with strong export activity are the two key elements justifying this sharp rise in prices. Wheat prices have returned to their highest levels since December 2014.

However, weather conditions allow good progress in soybean and corn harvesting. This limits the rise in the context of harvest pressure. The water deficit remains, however, in key wheat-producing states such as Kansas, with only 31% of the surface area judged to be good to excellent.

However, funds remain very active with near historic long positions in soybeans.

The funds were still net buyers yesterday for 12,500 lots of corn, 10,000 lots of soybeans and 4,000 lots of wheat.

Black Sea market

The harvest is progressing in Ukraine. 20 Mha of all crops have been cut since the beginning of the summer. 10.9 Mt of sunflower have been collected on 87% of the area. 2 Mt of soybean have been harvested with 28% of the area remaining to be cut.

In corn, while almost half of the area has been cut (44%), only 11.1 Mt have been harvested. Yields are still disappointing. The corn market continues to tighten locally with a price increase of nearly 10 $/t since the beginning of the week.

The winter crops sowing still show a significant delay compared to the average year. 4.6 Mha of wheat, 0.6 Mha of barley and 0.83 Mha of rapeseed are now in the ground.