European market

The agriculture market is following closely the relationships between Beijing and Washington with Donald Trump and Xi Jinping metting around 5 a.m. (French time) in Seoul. The enthusiasm around a possible agreement has already been felt on the markets, with a wave of buybacks initiated by US financial operators, bringing a hint of firmness to all global prices since the beginning of the week. Now it remains to wait for the conclusions to confirm or not the expectations.
European prices, and in particular French, have taken advantage of the US dynamics to reach levels not seen for several months, like the €193/t zone on Euronext for wheat. However, this level does not favour trade, because the French origin tends to be marginalized on the international scene. The price gap between French wheat and Argentine wheat is at its highest level since 2021, which does not bode well for the export dynamics of French wheat. For its part, the Russian offer is displayed at $ 233/t, which is only $ 5/t above French wheat.
The plantings are progressing in France and the conditions remain generally favourable, with some rainfall which facilitates the crops emergence. The question of the increase in areas remains raised, and the weather in the coming days will make it possible to refine the estimates.
Rapeseed February contract, meanwhile, has reached the symbolic €483/t zone, supported by US soybeans but also by sunflower. At issue: the Ukrainian harvests, slowed down by the rains, which could drastically reduce the yield potential in the country.

American market

The day promises to be particularly volatile on US markets. While Donald Trump left Seoul declaring himself satisfied with his meeting with his Chinese counterpart, no details have yet leaked from this exchange. After the purchase of several cargoes of American soybeans by Cofco in particular, the operators of this market have largely integrated the news in recent days. Now, the expectation of a solid agreement between the two parties plunges the markets into a certain opacity.
Opacity remains the key word of the last few days, especially since the "shutdown" is still in force. It is difficult for all operators to access the data, in particular for economists. This was also felt in the speech of the FED chairman yesterday, who is moving cautiously in the face of the absence of official data. Powell also said that a further rate cut in December was not certain and that opinions remained very different. In line with expectations, a further decline of 25 basis points was put in place this week.
Financial operators play a major role in the evolution of prices in recent days. While they held a significant net selling position on grains, they are gradually making repurchases in order to reduce their exposure to risk in the event of a wave of purchases from China.

Black Sea market

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