European market

Hesitation is the best way to describe the grain market in the middle of this week. The selling pressure that began at the end of last week is finding support from Chicago due to the rain forecast across the Corn Belt. At the same time, however, vessel loadings from Ukraine and Russia remain problematic, limiting the downside. In addition to the attention being paid to the global wheat trade, in which Ukraine and Russia account for 45 % of market share at the start of the season, European operators are also monitoring the possible evolution of corn and rapeseed flows. Indeed, Ukraine is the leading source of imports for these two products, both of which are in deficit in the European Union.

Meanwhile, oil prices are moving sharply higher again following Donald Trump’s tougher stance and the resumption of strikes on both sides of the Persian Gulf. The much larger-than-expected decline in US oil inventories is also supporting this market’s strength.

The euro/dollar is also regaining some firmness and has risen to 1.1450 after the Fed left interest rates unchanged yesterday between 3.50 % and 3.75 %, without providing any indication regarding its next monetary policy decision. The Fed remains torn between persistent inflation and Donald Trump’s desire to see rates move lower.

On the ground, the record temperatures once again affecting corn and sunflower crops should ease slightly over the coming days in France but are expected to persist across central Europe, where the situation is equally critical. Hungary and the surrounding regions are at the heart of this issue.

American market

The major weather models, known as the “European” and “American” models, are gradually converging in their forecasts for the United States at the end of this week. The arrival of beneficial rainfall of 25 to 50 mm is becoming increasingly likely across the Corn Belt, particularly in its western areas where crops are under the greatest stress.

As soybeans are more sensitive than corn to August weather conditions, soybean prices are falling more sharply. Corn is following the decline to a lesser extent. Meanwhile, wheat, although slightly lower, closed near unchanged levels as port disruptions in Russia and Ukraine persist.

Although having no impact on soybeans, which have been struggling since the start of the week, the sharp rebound in oil prices following the resumption of hostilities with Iran and the easing of the dollar index after the Fed’s status quo appear to be supportive factors for agricultural commodities.

Black Sea market

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