Analysis 21/03/2023

European market

The markets remain in their downward spiral. Large flows from Black Sea origins combined with financial funds' sell-off in a fragile world economic context continue to weigh on prices. Thus, wheat prices on Euronext are returning to pre-war levels. The flow of goods from Ukraine remains significant, despite logistical difficulties.

On the geopolitical front, Vladimir Putin held talks in Moscow with his counterpart Xi Jinping. At the same time the Japanese Prime Minister is visiting Kyiv.

On the international scene, Algeria is purchasing 70,000 t of corn from South America. Taiwan is also buying 56,300 t of milling wheat from the USA. Rapeseed prices sank again yesterday in the wake of biodiesel. The same is true for canola, which is at its lowest level in 21 months.

According to the Ukrainian Minister of Agriculture, wheat production for the 2023 harvest is estimated at 16.6 Mt compared to 20.5 Mt in 2022 and corn production at 21.7 Mt compared to 25.6 Mt last year. Only oilseeds are expected to show a slight increase to 3.8 Mt for rapeseed compared to 3.7 Mt and 11.5 Mt for sunflower compared to 11.1 Mt in 2022.

According to Crop Monitor, wheat yields in Europe are expected to increase for the next harvest, to an estimated 5.99 t/ha, up by 3% compared to 2022. Barley yields are potentially unchanged at 5.91 t/ha and rapeseed yields are slightly lower at 3.29 t/ha.

The dollar is down this morning against the euro at 1.0710 and at 77.50 against the ruble. Oil remains at relatively low levels at 67.25 per barrel in NY.

American market

Wheat prices fell again yesterday amid a sell-off from funds and an improvement in the Kansas crop rating where 19% of the crops are considered as good to excellent compared to 17% last week. The USDA estimates that 53% of winter wheat acreage is in water deficit, compared to 55% last week.

Soybean was up yesterday after the decline of last few days in the wake of oil.

Corn prices fell after last week's recovery, fueled by good export activity to China.

Export sales amounted to 716,618 tons of soybean and 374,224 tons of wheat, within the range of expectations. However, corn exports were well above expectations at 1,188,666 tons.

Yesterday, funds were net sellers in 2,000 lots of corn and 5,000 lots of wheat. They were net buyers in 3,000 lots of soybean.

Black Sea market

Request access to the full daily report on the Black Sea Basin via the Argus AgriMarkets service by clicking here.