European market
The June 2024 corn contract on Euronext returned to the €200/t mark after closing up €4.50/t on Friday evening at €201.75/t. This is the highest closing price for three and a half months on this market, which has been supported by a slower pace of imports into the European Union in recent weeks.
Caught up by corn, wheat expiring in May 2024 thus found support to close up +0.75 €/t at 206.50 €/t, its highest close for a month.
The continued weakness of the euro/dollar exchange rate at around 1.0650 is supporting European grains. The market is also taking account of the renewed risks in the Middle East and in the Black Sea, where infrastructure has again been damaged in the Odesa region.
As the week gets underway, it is the weather that will be causing concern. Early-morning frosts are affecting crops from Poland to France, just as they are reaching stages sensitive to cold. On Friday, FranceAgriMer gave soft wheat in France a rating of 64% “good to very good”, compared with 93% last year and the lowest since 2020.
The weekly ratings for winter barley and durum wheat have also been renewed, with 67% and 70% “good to very good” respectively. Spring barley, now 98% sown, saw its condition improve by 3 points over the week to 63% “good to very good”.
Rapeseed is also being penalised by the excessively wet and cold weather in Europe. Prices are continuing to consolidate at around €450/t on Euronext, amid an ongoing correction in palm oil prices in Kuala Lumpur.
American market
With funds particularly short, the Chicago market remains sensitive to short-covering operations. Wheat, corn and soybean prices closed higher on Friday evening, driven by fund buying in the face of geopolitical tensions in the Black Sea and the Middle East.
The worsening drought in the southern Great Plains is also driving discussions on the US wheat market. Traders will be paying close attention to the USDA’s weekly Crop Rating, due out this Monday evening at 10 pm (Paris).
In corn, the market welcomes the exemption granted by the EPA for the sale of 15% ethanol-based E15 fuel over the summer period, which was initially banned from June to September.
Although penalised by the decline in vegetable oils, soybeans followed that rise on Friday.
On Friday, the USDA announced a one-off sale of 216,500 t of US corn to Mexico and 121,500 t of US soybeans to an unknown destination.