European market
Very quiet session on Friday as many traders were attending the European Commodities Exchange in Brussels. Analysts are still noting a subdued export activity toward third countries, the pace will have to progress quickly to avoid a large report stock of cereals.
USDA report has confirmed ample supplies in wheat and comfortable in corn and soybean.
On the currencies, markets are undecided with the Eurodollar above 1.18 this morning. For coming months, some forecasts are predicting a bullish single currency that could touch 1.25 during 2018.
Barley and wheat sowing are progressing quickly in France, favored by ideal conditions. FranceAgrimer said that winter wheat plantings are now done up to 20% and winter barley up to 32% on the 9th of October. This is in line with last year’s momentum to date. Corn harvest is now achieved up to 28% to compare with 21% last season at the same period.
On the international stage, we can note the sale of 60 000 t of US corn to South Korea.
Rapeseed prices are still penalized by perspectives of Argentinian biodiesel imports and did not profit from the good performance of soybean in Chicago after the cut of US yields estimations by USDA.
American market
Prices remained firm in Chicago Friday evening, after that USDA report was judged as supportive for corn and soybean. Wheat was benefiting from buying operations from funds despite of a report regarded as bearish for this product.
Funds were net buyers in 9 000 lots of corn, 10 000 lots of soybean and 5 000 lots of wheat.
Export activity was strong last week except for wheat but operators are estimating that current price levels could lead to an improvement in competitivity of American origins.
Black Sea market
Black Sea area is about to upset the balances observed until now on grain markets. This agricultural “New Deal” in the region is resulting in a surge of harvested volumes and bumper stocks. The deep change in progress should allow structural changes allowing Russian and Ukrainian farmers to face climatic adversity with more resilience. This sector, already highly visible on export markets could gain further momentum. To put numbers on this phenomenon, the output of grains and pulses of the Russian Federation has progressed by +40% between 2013 and 2017, from less than 100 Mt to 140 Mt. Wheat is leading and is focusing all attention but the trend is also perceptible for the barley, corn, sunflower and soybean. The real challenge for the area will be to increase the logistical capacities to reduce the deficit of storage in large production areas. This year, the record wheat harvest should result in an increase of ending stocks of + 330% in Russia from the level recorded in July 2016.
