European market

The de-escalation of tensions in the Middle East materialized yesterday with Donald Trump’s announcement of a truce between Israel and Iran. Although very fragile, this development has reduced market participants’ risk aversion. As a result:

• A sharp drop in oil prices, with a low of $64.00/barrel in New York yesterday, compared to a peak of $78.40/b the day before
• A bullish rebound in the U.S. stock market, with the S&P 500 approaching its all-time highs
• A decline in the Dollar Index to recent lows, triggering a strong upward surge in the euro/dollar, which reached 1.1642 yesterday
• Renewed selling pressure across the grain markets

The prospect of intense international competition is once again weighing on the wheat market, dragging corn down with it. Rapeseed, like other oilseeds, is taking a hit following the dramatic drop in crude oil prices.

Meanwhile, the return of the heatwave in France is fueling discussions about its impact on both late-stage winter and spring crops, as well as increasingly vulnerable summer crops.

Although wheat and rapeseed harvesting has begun in early regions, attention in France is currently focused on the winter barley harvest. Harvesting is now progressing north of Paris, with overall feedback remaining positive in terms of both quality and quantity.

American market

The sharp drop in crude oil prices within just 24 hours dragged down all commodities in Chicago in its bearish wake. The easing of tensions in the Middle East has brought fundamental market factors back into focus.

For U.S. wheat, the key factor is a harvest that is now expected to accelerate and make up for delays thanks to the return of hot and dry weather. For corn and soybeans, current weather conditions across the U.S. Corn Belt are considered highly favorable for crop development.

The renewed selling by funds across all commodities further intensified yesterday’s downward pressure.

Corn, additionally weighed down by excellent harvest prospects in Brazil, is struggling on the Chicago market. It has broken through its recent technical support levels, setting new lows for the old crop.