European market

The markets were in a state of panic yesterday, for all products, amidst a global economic context where recession fears are on the rise. In addition, there is the risk of a new wave of covid spreading, prompting all players to reduce their exposure to market risks. The tightening of monetary policies is adding to the pressure on the markets, while global demand for cereals remains strong.

Among the key indicators of the economic situation, crude oil prices have fallen back below the symbolic $100/barrel mark, and the dollar has continued to strengthen, rising this morning to 1.0260 against the euro and 62.50 against the rouble. The fall in the Russian currency, coupled with the change in the calculation of export taxes, has enabled this origin to regain competitiveness on the international scene.

The French origin remains very attractive for wheat, with the sale at the beginning of this week of a new significant volume to Egypt, estimated at 170,000 t out of a total of 444,000 t, the rest being divided between 214,000 t for Russia and 60,000 t for Romania.  Harvesting is continuing in France under good conditions, with its share of surprises and significant differences in yields depending on the regions and plots. Arvalis estimates the average soft wheat yield for France at 69.5 quintals/ha, down 3% compared to the ten-year average.

The EU should have exported 27.47 Mt of wheat in the 2021/2022 campaign, compared to 25.71 Mt the previous year. Exports of barley, however, are down to 6.97 Mt for the year just ended, compared with 7.42 Mt the previous year. Corn imports are up to 16.37 Mt from 15.22 Mt in the 2020/2021 season.

Exports from Ukraine are still much lower than last year. According to the Ukrainian Minister of Agriculture, only 138,000 t of wheat were exported in June compared to 662,000 t to date last year. A total of 2.17 Mt of all grains and oilseeds were exported in June. This compares to shipments of 6 Mt per month before the conflict.  

Yesterday's StatCan report confirms good conditions in Canada at the moment with 25.4 million acres of wheat planted, a record since 2013, and 21.4 million acres of canola, down slightly from last year, but within the range of expectations.

Palm oil fell sharply again this morning in Kuala Lumpur, dropping 9% from the previous day. Rapeseed has managed to keep up, despite higher than expected yields overall, but still benefiting from comfortable crushing margins.

American market

Prices fell sharply in Chicago yesterday, in a climate of sell-off close to panic on fears of economic recession. However, the climate is not the most favourable for the development of spring crops, since the crop rating for corn this week is only 64% good to excellent, down 3 points from last week. Soybeans are also down 2 points with 63% rated as good to excellent. Only spring wheat is improving with 66% rated as good to excellent compared to 59% the previous week.

Soybean and corn prices in the US are back to the levels they were at before the start of the conflict in Ukraine, also penalized by the strength of the dollar.

Export inspections for the past week came in at 676,824 tonnes for corn, below expectations.  Export inspections came in at 111,830 tonnes for wheat and 354,987 tonnes for soybeans.

Funds were net sellers yesterday on 24,000 lots of corn, 23,500 lots of soybeans and 13,500 lots of wheat.

Black Sea market

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