December 03rd

Market Report

The market recovery that began on Wednesday continued yesterday to almost wipe out the fall in prices recorded from last Friday when the arrival of a new Covid variant was reported. This unprecedented volatility is particularly noticeable in rapeseed, where prices have fluctuated by more than 40 €/t between Wednesday's low and Thursday's high.

The last few days' downturn has led to new tenders. After Egypt's purchase of 600,000 t of wheat on Monday, Saudi Arabia has launched a tender in 535,000 t of milling wheat. Tunisia would have bought 100,000 t of milling wheat, 100,000 t of feed barley and 92,000 t of durum wheat. The demand for wheat has triggered a significant rebound of prices. Also, new rains are expected in Australia, which will degrade further the quality of the crops. It is difficult to estimate the percentage of feed wheat at this stage, but traders say it could exceed half of the harvested volume.

Argentina could plant 7.3 million hectares of corn this year, according to the Buenos Aires exchange, an increase of 200,000 hectares compared to the latest estimates.

Rapeseed is rebounding sharply against the backdrop of a global S&D balance deficit, despite the increase of production in Australia. The rise in soybeans is also supporting prices. Also note yesterday that the US sold 130,000t of soybeans to China and 164,100t to an undisclosed destination.

According to the FAO, food prices are at their highest level since June 2011, raising fears of a crisis in the poorest countries.

The Eurodollar is steady at 1.1300 and The Dollar vs. Rouble is dealing at 73.75 . Oil is progressing at 67.80 $/b in NY despite OPEC+'s decision to maintain its production increase of 400,000 bpd in January. However, the cartel reserves the right to adjust its policy at any time depending on market developments.

American market
Wheat prices in Chicago rebounded sharply yesterday. However, they have not yet erased early week losses, mainly fuelled last Monday by Abares' figures about a record wheat production in Australia, one of the main competitors of the USA on the export markets.

Soybean is rebounding, amid new US export sales to China. However, from March onwards, competition from Brazil will be fierce, with production expected to reach a record high, except if end-of-cycle incidents occur.

Yesterday, funds were net buyers in 7,500 lots of corn, 8,500 lots of soybeans and 13,000 lots of wheat.