January 27th

Market Report

Wheat prices on Euronext gave up the ground gained the day before, confirming the extreme volatility of markets currently driven mainly by geopolitics. Appointments are made between Europe and Russia to try to limit the tension that currently prevails with Ukraine. The current political context should continue to drive the markets, at least in the short term with its share of uncertainties.

Internationally, Algeria would have bought about 80,000 t of wheat probably of Black Sea origin. However, the French origin would have been accepted apparently if it had been competitive. South Korea purchased about 193,000 mt of maize from optional origins.

The state of winter crops in France seems satisfactory for the moment. It should be noted that Phosmet, an autumn insecticide generally applied to rapeseed, has been banned from now on, making it even more difficult to control pests in this crop, whose acreage has been declining for several years.

Palm prices remain very firm in Malaysia, indirectly supporting the price of rapeseed which rebounded yesterday on Euronext, after their sharp fall in recent days. Canola was also slightly up on the session of this Wednesday.

The Fed confirmed a rate hike in the U.S. for the month of March, thus supporting the dollar, which is posted this morning at 1.1220 against the euro and 79.60 against the ruble. Oil remains very firm at 86.70 usd/barrel in New York, reaching its highest level since 2014.

American market
Wheat prices continued to decline in Chicago, reversing last week's trend. The strength of the dollar against all other currencies is weighing on prices denominated in U.S. currency, losing competitiveness in exports.

Soybeans suffered some profit taking this morning in pre-opening after the clear increase of the day before, fueled in particular by the firmness of oil but also by the uncertainty that still weighs on the production potential on the South American continent.

Corn prices remain firm in the wake of ethanol prices and all biofuels. However, ethanol stocks have been rising in the US since the beginning of January, impacting the margins of the industry.

Traders will be closely watching the week's export sales released this afternoon.

Funds were net buyers yesterday for 7,500 lots of corn and 15,000 lots of soybeans. They were net sellers for 12,000 lots of wheat.