European market

The markets closed yesterday with a rebound on cereals. The firmness was displayed at the very end of the day in the wake of Chicago. Demand continues to be strong on the international scene, with transactions already recorded for the 2021 harvest. China remains the main player.

Optimism is also seen in the stock markets, with the prospect of a rebound in the world economies in the coming months. In this context, crude oil continues to increase posted this morning in New York at 45.30 $/barrel. The dollar is decreasing, posted at 1.1910 against the euro and at 75.40 against the ruble.

On the international scene, Turkey has bought around 350,000 t of corn and 155,000 t of feed barley. Tunisia has bought 92,000 t of soft wheat, 75,000 t of durum and 75,000 t of feed barley.

Climatic conditions remain a source of concern, mainly the state of winter wheat in the USA and the water deficit over much of central Brazil, which could negatively impact the yield potential of soybeans.

While winter wheat acreage is likely to increase significantly in Europe, Russia and the USA, it will be down on last year in Ukraine according to our Kyiv office, as a result of dry conditions that have impacted planting.

Rapeseed was decreasing yesterday on profit-taking and in the wake of canola and palm. However, this downturn is considered as technical. The vegetable oil market remains tight in the face of declining palm production and rising biofuel prices.

American market

Wheat prices were closely followed yesterday in Chicago, notably because of funds’ purchases after the sharp decline in the USDA's crop rating on Monday evening. The concern is about wheat entering winter in insufficient conditions to face a possible cold spell.

Corn was hardly moving yesterday despite the USDA's announcement of the sale of 334,000 t to an undisclosed destination. Soybeans closed slightly higher, still in a tight context in the face of Chinese demand and the already very large sales commitment on the part of American operators. The water deficit in Brazil is also a source of concern.

Today operators will be caution before the markets close tomorrow and half a session on Friday for Thanksgiving.

Funds were net sellers yesterday for 10,000 lots of corn and 2,500 lots of soybeans. They were net buyers for 11,000 lots of wheat.

Black Sea market

While the execution of forward contracts for the 2020 harvest, particularly in corn, sunflower and soybean, remains uncertain, traders based in Ukraine begin to make the first individual price offers in wheat for the 2021 harvest. Analysts at Agritel Kyiv are reporting bids at around 215 $/t on a CPT-Odessa basis. 

This price level is never seen since Agritel Kyiv analysts have been following the bids for forward contracts from the 2016 harvest. No doubt such levels should encourage producers in the Black Sea basin to commit part of their 2021 harvest in a context of record winter acreage in Russia.