European market

The rise of the euro is penalizing our export competitiveness and is pushing prices lower. From the start of the year, the single currency progressed by +12.5% vs dollar, impacting European wheat prices by about 20 €/t. Business on wheat contracts remain sustained, yesterday, about 54 000 contracts were exchanged on Euronext and 1 625 on the CME. On the international stage, Jordan bought 50 000 t of wheat, optional origins, and Japan bought 133 000 t sourced from USA, Canada and Australia. On the first month of the new marketing year, Europe exported only 941 000 t of wheat vs 2 623 000 t last year to date. The improvement of climatic conditions in USA added to the progress of the Russian harvest who is showing promising yields, pushed markets lower. Only spring malting barley prices have shown a progression due to a good export activity and of fears of degraded qualities in Germany and UK. Rapeseed is also penalized by the drop of soybean prices in Chicago and by better weather perspectives in Canada.

American market

Further fall of soybean complex in a context of improvement of climatic conditions and good harvest perspectives. Only corn would have suffered of the hydric deficit in the Corn Belt and analysts are now predicting yields close to 166 bushel/acre far away from USDA’s last prediction of 170.7. Export weekly data were very disappointing with 475 000 t of corn vs traders’ expectations of 500 000 to 900 000 t, 145 500 t in wheat vs 300 000 to 500 000 t awaited. Only soybean exports were in line with anticipations. Yesterday, funds were net sellers of corn in 4 000 lots, of soybean in 10 000 lots and of wheat in 3 000 lots. The soybean is mainly weighing on commodities prices, analysts are now joining last USDA’s assessment of 48 bushel/acre.

Black Sea market

During the first month of the new marketing year, Russia managed to export nearly as much grains as last year despite of delays recorded at the very beginning of the campaign. In further details, on the 26th of July, the Federation had exported 0.8 Mt of wheat (-36% compared to last year to date), 0.5 Mt of barley and 0.35 Mt of corn which is 20 times more than last year’s volume on the same period. Of course, exports will gain momentum from now. In this respect, we can note that in two main wheat contributors’ districts, South and North Caucasia, the delay in harvest progression has now been caught up. In details, 5 M ha have been harvested in South district (86% of target) vs 4.5 M ha last year to date. In North Caucasia, 1.8 M ha have been done (92%) vs 1.3 M ha last season. In the South district, yields are +3% over last campaign. At the opposite, in the Central and Volga districts, the delay remains important, respectively, only 1.1 M ha have been harvested (27% of target) vs 1.7 M ha in 2016 and 0.5 M ha (7%) vs 2.2 M ha in 2016.