European market
Cereals markets have lost some ground once more, mainly on wheat, after the break of various support levels in Chicago.
The quality of French wheat remains an issue, mainly due to low specific weights. According to FranceAgriMer, only 28% of this year’s harvest show a specific weight above 76 kg/hl while 65% of the volumes have protein levels higher than 12.5%.
On the international stage, Egypt returned and bought 180 000t of Russian wheat. Prices were in the range of US$ 177.35 to 178.45 on FOB and US$ 185.15 to 186.25 on CAF. Apart from that, it is interesting to note that Egyptian authorities have again confirmed their policy of 0% of ergot for their purchases of wheat. Suppliers are expected to pay special attention to this fact.
In terms of weather conditions, the head wave currently covering Europe implies certain worries regarding the upcoming corn harvest. For France, however, crop ratings did not change compared to last week, judged at 63% according to FranceAgriMer. The situation in Ukraine is keyed up. Here, weather conditions are rather beneficial and allow for a production estimation at 26 Mt.
Rapeseed prices decreased on Friday, pressured by a record soybean production expected in the US. Further bearish potential has been implied by technical corrections on the palm oil market.
American market
New decrease on the US market on Friday with the break of key technical thresholds such as the 4 $/bu on wheat on the closest contract of September 2016.
Corn and soybean prices have also lost some ground, following the conclusions of the ProFarmer crop tour. In fact, corn production is estimated at 170.2 bu/acre by the analysts below the USDA numbers at 175.1. This number remains substantial and world will not lack any corn next campaign. On soybean, analysts are expecting a yield of 49.3 bu/acres against USDA at 48.9 bu/acres.
Funds were net sellers Friday for 15 000 lots of corn, 6 000 lots of soybean and 7 000 lots of wheat.
Black Sea market
Thanks to recent precipitation, Ukrainian farmers are able to proceed with their rapeseed plantings. Only last year, the progress was hold by particularly dry conditions in autumn triggering a reduction of surface for winter rapeseed. According to authorities’ evaluation, 300 000ha of rapeseed are sown so far, compared to only 120 000ha last year at the same time.
Current price levels for rapeseed encourage farmers to come back to an average rapeseed surface, close to 800 000ha. Currently, CPT-prices are close to 420 $/t, compared to 375 $/t during the early harvest period.
