European market
Market news continues to be dominated by macroeconomic factors with a strong impact of the euro's downturn on prices. The Italian crisis led to sharp decline of the European currency, supporting prices on Euronext band this despite the evolution of fundamentals. On this last point rains are expected in the coming days on southern Russia, which should be beneficial to crops if the forecasts turn out to be accurate.
Current price levels are encouraging producers to start or advance their sales. It should also be noted that the upward movement recorded on Euronext does not have a full impact on physical prices, as the basis (price difference between the two markets) also shows a return of volatility.
On the international stage, Algeria is seeking milling wheat for loadings during the first two weeks of July. The US also sold a little more than 231 000 t of corn to an undisclosed destination.
Canola is benefitting from fears of a water deficit in Canada and the good performance of soybean, mainly due to strikes by truckers in Brazil and Argentina.
Palm oil is registering a decrease this morning on Kuala Lumpur, which should limit the upward potential for rapeseed.
American market
Downturn in Chicago in a context of an increase of the dollar, profit takings by funds and better crop conditions in the US.
Since last week, the USDA displayed an increase of 2 percentage points for “good to excellent” wheat crop ratings, now displayed at 38%. For corn, plantings are now finished at 92 % compared to 90 % for the 5-years average. Crop ratings are displayed at 79% of “good to excellent” against 64 % last year.
For soybean, plantings are also in advance since 77% of the awaited acreage is now sown against 62% for the 5-year average.
Beneficial rains are awaited on the Corn Belt in coming days.
Funds were net sellers in 22 000 lots of corn, 9 000 lots of soybean and 8 500 lots of wheat.
Black Sea market
On the eve of June, Ukrainian producers are finishing corn sowings. Yesterday, the authorities showed that 4.515 Mha were planted against a target of 4.6 Mha. Therefore, the corn area is about to increase of + 100 000 ha compared to last year and so +2.22%. However, unanimously, the various market operators believe that the USDA's corn production forecast for the country (up to 30Mt) is way too high. Indeed, they remain skeptical about a record corn yield in this season as anticipated by the USDA. Currently, the consensus is in the range 26.5-28Mt.
It is certainly in Russia that the USDA estimate for the corn production is the most unlikely. Indeed, the sown area should not exceed 3Mha compared to a USDA projection of 3.4Mha. Same as in Ukraine, operators do not anticipate a record yield. Therefore, the difference between the USDA forecast at 19Mt for Russia and the expectations of local operators around the 15Mt is even greater than in Ukraine. These estimates could change in the next monthly report of June.
