European market
Cereals prices increased sharply last Friday in the wake of Chicago. Two factors justified this rally: the improvement in trade relations between USA and China and fears of frost damages in the US Corn Belt.
Traders erased Thursday’s losses recorded after the USDA’s report. Doubts are remaining about the actual corn yields in USA. The trend relation between US and European markets is strong. Supply are ample in Europe and the export competition with Black Sea is stiff.
According FranceAgrimer, 4% of winter wheat was seeded on October 7 in France, this must be compared with 15% completed at the same date of last year. Harvests of corn were estimated achieved up to 14% vs 65% last season to date. Recent precipitations in France have delayed autumn works.
Rapeseed prices have retreated last week mainly due to the weakness of the palm. The downward trend persists this morning on this market as India could implement import duties.
Th euro is dealing at 1.103 vs dollar to start the week.
American market
Surge of prices in Chicago last Friday on the back of short covering from funds that offset the day-before sell-off that followed the release of the USDA report.
Optimism was back after a partial deal concluded between USA and China. However, the relations remain fragile between the two countries.
Climatic conditions in Dakota, Minnesota and Iowa raised concerns as negative temperatures recorded during the weekend have probably stopped the final vegetative development of late corn crops. It is too early to assess possible damages.
The swine fever in China has cut country’s pig herd by -40% from last year according the Chinese authorities. This has caused a sharp diminution of soybean purchases even if the business is currently picking up a bit.
Friday, funds were net buyers in 40 000 lots of corn, 15 000 lots of soybean and 10 000 lots of wheat.
Black Sea market
The Ukrainian Prime Minister, Alexander Goncharuk, said last Friday that companies owned by a foreign agent will not be in capacity to buy lands in Ukraine. This amendment has been passed in the law about the opening of the agricultural lands and is caused by the high level of demand from citizens. The law has been promulgated by the Rada and is visible on its website from October 7. The ban will not concern the foreign companies paying taxes and registered in Ukraine for more than 3 years. Of course, these entities must be agricultural producers and already renting lands.
