European market
Last week ended on a firm note for grains on both sides of the Atlantic. European grains and oilseeds benefited from a euro/dollar exchange rate at its lowest level for nearly 6 months at 1.0650. Crude oil also provided support for grains. A barrel of WTI topped $87 for the first time in 6 months on Friday afternoon in anticipation of heightened geopolitical tensions in the Middle East.
In this context, rapeseed has closed at a 6-month high of €459/t for May 2024. This expiry will be in the news again on Monday 15 April as options expire. The same will apply to the closing of options on the Euronext wheat May 2024 contract.
The latter continues to trade in a very narrow range of between €200 and €206/t, while the next expiry, September 2024, has been fluctuating between €214 and €218/t for 12 sessions now. Euronext June 2024 corn is more ambitious, with its highest close since December 1 at €194.50/t.
Developments in the Middle East will be closely watched at the start of the week, even if the events of the weekend have been put into perspective for the time being on the crude oil market. The weather is also being closely monitored, with rainfall deemed insufficient for wheat in Kansas and southern Russia.
In France, the condition of wheat is deteriorating, with 64% judged to be “good to very good” according to FranceAgriMer, compared with 65% the previous week and 94% last year to date. Winter barleys, meanwhile, gained 1 point over the week to 67% “good to very good”. Durum wheat remains stable at 70% “good to very good”. Spring barleys lost 1 point over the week to 60% “good to very good”, while sowings were 91% complete by 8 April.
American market
The firmness of crude oil prices amid growing geopolitical tensions in the Middle East supported grain prices in Chicago on Friday, with a general rise across all commodities and funds present for purchases.
The soybean market did not react to the announcement by Chinese customs of particularly low monthly imports of just 5.54mn t of soybeans, the lowest March figure for 4 years. US traders are above all awaiting NOPA’s monthly report on US crush for March, which is expected to be a record month.
With drought conditions rising last week from 38% to 50% “abnormally dry” in Oklahoma and from 78% to 81% “abnormally dry” in Kansas, traders will be paying particular attention to the USDA’s crop rating for winter wheat in the US on Monday evening.
In corn, operators are wondering about the large discrepancies in production estimates posted for South America between the USDA and local references. The fairly low figures from Conab in Brazil and the Rosario and Buenois Aires exchanges in Argentina are adding to the uncertainty.