Wheat and corn prices went down on Monday, while soybean price was up. The situation in Paris was similar.

The EUR/USD currency pair went down to 1.0746. Light oil was down to 53.10 USD/barrel.

German Minister of Finance Wolfgang Schäuble added fuel to the fire of the transatlantic disagreement about the appropriate currency level of the Euro, accusing the European Central Bank (ECB) of keeping it too low for his country.

New purchases on behalf of China boosted soybean yesterday. The Chinese were back on the market as soon as their New Year celebrations were over. There was demand from other Asian countries too. Some short positions were closed as well. Soybean processing companies in China increased their margins in the past few weeks up to 0.31 USD/bushel compared with 0.28 USD/bushel a year earlier.

News from Argentina is contradictory. Some areas get new rainfall while others are still hit by drought. So far, this is neutral news for the market.

News about corn areas come in from China. Decrease in corn areas is projected in 2017 as well as the next few years. The policy of sustainable agriculture is has been left out on account of a more balanced plan. In 2017, 6.7 mln decares of corn less than 2016 will be sowed in China. Corn areas in the country were 370 mln decares in 2015 (+61% upon 2001). The current corn yield will be 4% lower down to 215 mln tons while import will go 70% down to 1 mln tons.

News of low temperatures in the Black Sea region during the week, but snow cover will be thick enough to protect the crops. A peculiar fact is that crops will not have a positive growth this winter. This process will start in spring, possibly late spring.

French Ministry of Agriculture projected lower winter wheat crops in the country by 310,000 decares down to 51.6 mln decares. Analysts expect about 38 – 40 mln tons of wheat produced in the country in 2017 with only 28 mln tons in 2016. There is a palpable difference and this will turn France into a big wheat exporter again.

31% of soybean areas have been harvested in Brazilian state of Mato Grosso, which is far over the usual level. South American ports are gradually filled with soybean and soybean products. 4.0 mln tons of soybean are now awaiting export at Brazilian ports. Meanwhile, prices in the USA are competitive and this will allow the country to remain firmly on the market.

27% of planned corn areas have been sowed in Brazil with 11% a year ago. AgRural analysts projected higher soybean production in Brazil in 2016 – 2017 of 103.3 mln tons compared with 105.4 mmln tons in the previous forecast. Changes came as a result of the favourable weather conditions in the state of Mato Grosso, which will boost crop growth, as well as the intensified harvesting campaign.

In South America, rain or no rain, we are moving fast towards an excellent new soybean and corn yield. Markets will feel it very soon, but huge price decline is unlikely anywhere in the world. Demand is extremely good and we cannot expect the whole world production will be offered on the market immediately, thus push prices down.

639,900 tons of grain were exported from Ukrainian sea ports between January 28 and February 3 compared with 705,000 tons a week ago. Export included 140,000 tons of wheat and 438,500 tons of corn and 61,400 tons of barley. India with 78,900 tons, the Netherlands with 75,300 tons and Iran with 70,000 tons were the biggest buyers.

375,400 tons of grains were exported from Russian sea ports between January 27 and February 2 compared with 681,400 tons a week ago. Export included 276,600 tons of wheat, 93,300 tons of corn and 5,500 tons of barley. Turkey with 55,900 tons, South Korea with 38,400 tons and Yemen with 25,000 tons were the biggest buyers. 

Total grain export from Russia and Ukraine for the past week was 1,015,300 tons compared with 1,386,400 tons a year ago. Corn made 52% of the total export. There is some decline, mainly with the wheat.

22.746 mln tons of grain were exported from Russia between the beginning of the season and February 2, 2017 including 17.728 mln tons of wheat, 1.985 mln tons of barley and 2.877 mln tons of corn. Export is +1.2% up upon last year including wheat +5.4%, corn +38.9% and barley -41.6%.

Canada, produced the following figures: 21.5 mln tons of grain were exported from Canada between the beginning of the current season (August 1, 2016) and January 29, 2017, which is 2% less than the previous year, Canadian Grain Commission announced. Soft wheat export has been 20% down from the previous year to 6.7 mln tons while hard wheat went 13% down to 2.0 mln tons. Rapeseed export grew by 11% to 5.3 mln tons, soybean jumped by 21% to 3.2 mln tons and peas were 23% up to 2.0 mln tons.

Indian farmers sowed 645 mln tons of grains during the last sowing campaign, which is 6% less than last year. Wheat areas reached 317.8 mln decares while beans are 159.7 mln decares. Grain areas were smaller in 2014 and 2015 due to drought. Grain areas were 644 mln decares in 2013. Weather conditions are good and a record grain yield is expected.

If this forecast is achieved, India can leave the world grain market completely with no grain purchase or export. The country has been an active buyer of Australian or Black Sea wheat, which boosted the prices in Ukraine.

Soybean price – Soybean futures in Chicago went up by 7 cents/bushel yesterday. Weekly soybean checks from the USA are at 1.635 mln tons, which is lower than the previous week but still 28% higher than last year.

Corn price – Corn futures in Chicago went down by 1 cent/bushel yesterday. Weekly corn checks from the USA are at 1.113 mln tons, which is 4.8% higher than last week and 240% higher than last year.

Wheat price – Wheat futures in Chicago went down by 2.5 - 5 cent/bushel yesterday. Weekly wheat export checks from the USA are at 618,235 tons (+86% and +54%). USDA is expected to project on Thursday season ending stocks of 253.13 mln tons.