Analysis 08/11/2021

European market

Further decline on Friday for all products. The market must catch its breath, even if the fundamentals have not changed much. The strength of the dollar is also a downward factor for Chicago's prices, which is still the world' s leading market.

The rebound in global Covid cases could prompt a review of economic growth forecasts and perhaps slow the soaring energy prices.

On the international scene, there was little activity on Friday. Pakistan did not proceed with its wheat tender in 90,000 t. Competition on the North African market could be stiff for French origins with Argentina as a challenger.

Corn harvests are continuing, but are delayed by logistical and grain drying difficulties, in a context of rising energy costs.

According to FranceAgriMer, 73% of the corn area was harvested by 1st of November, compared with 54% last week and 93% last year to date. 80% of the wheat area was sown compared with 61% last week. 90% of the barley acreage was planted compared with 78% last week.

Rapeseed prices lost ground on Friday in the wake of canola and soybeans.

The dollar remains firm at 1.1560 against the euro and 71.30 against the ruble. Oil rebounds to 82.20 $/b in New York as OPEC+ will stick to a production increase of only 400,000 barrels/d from December 1.


American market

All commodities decline in Chicago on Friday as traders took profits ahead of tomorrow's USDA report. The yield estimates for corn and soybeans are expected to be raised from last month.
Corn export sales have been disappointing so far, with a lower activity to China than expected. Planting conditions in South America remains favourable. The record ethanol production is still a supportive factor for corn.

Another positive element for the corn is the firmness of fertilizer prices, which could encourage growers to switch to less nitrogen-intensive crops. The USDA on Friday estimated US corn acreage for next year at 92.0 million acres vs. 93.3 million this year and 87.5 million acres of soybeans vs. 87.2 million this year.

In wheat, the market is supported by a disappointing winter wheat crop rating. The water deficit in the Black Sea region, penalizing winter grain plantings, must be considered as well. It could limit the potential downward movement of prices.

On Friday, funds were net sellers in 7,500 lots of corn, 11,000 lots of soybeans and 4,500 lots of wheat.

Black Sea market

The water deficit continues in the Black Sea basin, particularly in Ukraine. This is affecting about 1/3 of the area and reducing the sowing estimates for winter cereals.

According to the Ukrainian Minister of Agriculture 87% of the grain acreage has been harvested to date, including 32.3 Mt of wheat, 9.6 Mt of barley and 22.8 Mt of corn.

On Friday, wheat prices were slightly higher in Ukraine, while those in Russia were a bit lower.

In Ukraine, corn prices were down as work progressed. The harvest was estimated to be 73% complete by the 1st of November.