Analysis 17/01/2022

European market

Wheat continued to fall on Euronext in a context of insufficient export activity and another risk of seeing the French origin boycotted by Algeria in its latest tender. Nevertheless, export activity to Morocco seems to be sustained. Algeria would have bought about 600,000 t of optional origins. The origins selected could come from Argentina and the Black Sea basin, despite the good competitiveness of the French origin. Diplomatic relations remain a source of tension.

On the international scene, we can also note the purchase by South Korea of 198,000 t of corn and 50,000 t of feed wheat probably from Australia.

Operators are focusing on weather conditions in South America with rains confirmed in Argentina. Safras has a production estimate of 132.3 Mt of soybeans for Brazil and 115.64 Mt of corn.

Rapeseed rebounded spectacularly on Friday, still in a context of extreme volatility, also fuelled by the close of February options last Friday. Canola, on the other hand, was losing ground. Indonesia will test biodiesel made from 40% palm oil.

The dollar continues to show some weakness at 1.1420 against the euro and 76.24 against the ruble. Oil remains firm at 84.20 $/b in NY.

American market

Corn prices stayed strong in Chicago on Friday, while wheat and soybean prices retreated. The prospect of rain in Argentina at the start of this week put pressure on prices and prompted a number of traders, particularly financials, to take profits on their long positions. In soybeans, export activity is slowing down, especially from China.

In corn, the market will be cautious as long as planting conditions in Brazil for safrinha are not known. In addition, uncertainty weighs on planting intentions in the US, particularly in view of the increase in fertiliser prices.

The price of wheat in Chicago is falling due to the lack of competitiveness of US origins on the international scene.

Funds were net sellers on Friday in 4,000 lots of soybeans and 4,000 lots of wheat. They were net buyers in 6,500 lots of corn.

US markets are closed today due to Martin Luther King Day.

Black Sea market

Last Friday, Ukrainian and Russian wheat prices continued to fall amid weak demand. Even Iran's purchase of Russian wheat and Algeria's purchase of Ukrainian wheat did not support prices. 
On the local Ukrainian market, wheat prices also fell sharply, pressured by weakening hryvnia against the dollar, as tensions rose amid a possible military confrontation between Russia and Ukraine.  

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