European market
The grain market was digesting USDA's September report and focusing on record US corn yields at 181.3 bushels per acre. The Russian wheat forecast was also reviewed up to 71 Mt. Even though these figures have to be further confirmed especially with current adverse weather conditions in Siberia, they are currently putting bearish pressure on prices.
Another element of pressure on European prices was the sharp rise of the Euro currency vs. the USD to 1.1700. The ECB policy is still supportive but it has been overshadowed by the slowdown of US inflation.
Therefore, wheat and corn are going on evolving in a short-term bearish trend on Euronext which is amplified by the negative influence of the Chicago market.
However, when focusing on fundamentals, the market still looks very tight with lower carry-out strong among the 8 major wheat exporters. The main wheat importing countries are taking advantage of the current bearish trend to actively purchase. After Egypt and Algeria yesterday it was Tunisia and Saudi Arabia that launched their tenders. Algeria may have bought a substantial volume of 630 000 tones of wheat between 262 $/t and 263.25 $/t CAF (optional origin but obviously mostly French).
The Tunisian Grain Board is also buying durum wheat and feed barley.
The Australian situation is still under surveillance with a persistent water deficit on the east coast and a return of cold on the west coast.
For oilseeds, fundamentals are heavy for both palm and soybean.
American market
While the main importing countries are buying cereals of the Black Sea area, the wheat from the US remains neglected especailly by North African and Middle East clients. The poor weekly export figures oconfirm this situation. As a result, the US wheat prices continue to fall seeking for international competitiveness. The settlement below 5$/bushel in Chicago for the first time in two months could be considered as an important signal.
The corn export figures were better allowing the product to avoid significant losses.
Black Sea market
The tribute paid in early September in Donbass to the "president" of the self-proclaimed Donetsk Republic proves the shock perceived by the population of this industrial and mining basin. 100 000 people would have accompanied the funeral procession of the war chief, who died on August 31, after a bomb blast in a restaurant. While the Kremlin called the assassination a provocation and sent its condolences to the family of Alexander Zakharchenko, the Ukrainian authorities in Kiev denied any involvement and attributed this murder to internal quarrels within the rebel movement. As a reminder, this hidden conflict (and forgotten by the European press coverage) between Ukraine and its two separatist regions of Donetsk and Lugansk has already been responsible for more than 10 000 death since 2014. Unfortunately, the conflict is far from settled.
