European market

Yesterday, cereal prices retreated and veg oils plunged.

Another day of good activity on the US corn market yesterday with a further purchase of China in 696 000 t. In last 3 days, China bought more than 3 Mt of US corn. We can note also the purchase of 50 000 t of US milling wheat by South Korea. Tunisia bought 117 000 t of milling wheat, 42 000 t of durum wheat and 75 000 t of feed barley, all optional origins but that should be sourced by Black Sea countries.

The Chinese government could act to reduce the corn and soybean use in the animal feed sector. This news remains to be confirmed.

On a climatic point of view, conditions are favourable in Ukraine but need to be scrutinized in Russia to check crops conditions in this end of winter, especially in the centre of the country.

Rapeseed prices plummeted yesterday after beneficial rains in Argentina that brings back optimism on the soybean harvest. The palm and canola experienced a sharp decline as well. The market has been hit by the fall of crude oil following an increase in US inventories for the 5th week in a row. Technical adjustments have also pushed prices down before the expiry of the April contract on the WTI where speculative positions were quite big.

The dollar is firmer this morning at just above 1.19 vs. euro and 74.25 vs. rouble. The US crude oil is dealing below 60 $/b in NY.

American market

Wheat prices slumped yesterday due to welcome rainfall especially in Kansas. Now, 17% of the crops are judged in hydric deficit vs. 45% last week. Weekly wheat export sales amounted to 529 107 t, in line with expectations.

In corn, export sales were beyond expectations at 1 226 800 t but soybean sales were disappointing at 202 400 t.

The decline in prices seen in Chicago is mainly caused by funds’ profit takings a few days ahead of the crucial USDA report about plantings intentions.

In Argentina, beneficial but heterogeneous rains are noted.

Funds were net sellers in 35 000 lots of corn, 14 000 lots of soybean and 5 500 lots of wheat.

Black Sea market

In Ukrainian ports, corn is trading at the same price as feed wheat. This situation of parity between the two cereals is particularly unusual, the last time it occurred was in the spring of 2018, when production was negatively impacted by a water deficit. Chinese demand, with already 5 Mt loaded to this destination since the beginning of the campaign, compensates for the weakness of European demand and still offers strong support to the corn.

At the start of the corn harvest last October, this cereal was trading with a $30 discount compared to feed wheat.