February 14th

Market Report

The markets are very nervous in a very tense geopolitical context. A Russian invasion of Ukraine would probably have major consequences on logistics flows, further straining a market that has already been facing a deficit in sea flows for several months. As a result, the S&D fundamentals are for the time being relegated to the background. It is difficult to anticipate the outcome of a conflict in the Black Sea basin.

In the current context, prices are retesting areas of technical resistance. According to Agritel analysts, French wheat exports to Europe should be revised upwards, while the third country export target of 9 Mt could be difficult to reach, unless there is a military conflict in the Black Sea basin. This would encourage importing countries to further secure their supplies from Western Europe.

The French Ministry of Agriculture has revised downwards its estimate of winter soft wheat areas in France to 4.75 million hectares, a drop of -4.3%. The current conditions of the crop is globally satisfactory with mild temperatures.

The export taxes imposed by Russia amount to 92.8 USD/t for wheat, 74.1 USD/t for barley and 52.7 USD/t for corn for the period from 16 to 22 February.

On the international scene, the US sold 108,000 t of soybeans to China and 128,000 t of corn to Japan on Friday.

Rapeseed prices are rising in the wake of palm and crude oil, while canola prices are stalling. Palm oil is benefiting from a reduction of the import tax by India from 7.5 % to 5 %.

American market
Sharp rise of all commodities prices on Friday as well as in pre-opening in Chicago, consequence of an increased risk of Russian invasion in Ukraine. Remember that Russia is the first world exporter of wheat and Ukraine is the fourth. For corn, Ukraine is the world's third largest exporter.

Soybean production estimates in Brazil are regularly revised downwards, with many analysts now not ruling out production of less than 130 Mt.

According to Safras X Mercado, 25.6% of Brazil's soybean area is now harvested, compared with 7.1% to date last year and a five-year average of 16.2%.

On Friday, funds were net buyers in 4,500 lots of corn, 5,000 lots of soybeans and 13,500 lots of wheat.