Wheat price soared in Chicago on Thursday with soybean plummeting and corn following with a smaller drop.

The EUR/USD currency pair went down to 1.0666. Light oil went up to 53.10 USD/barrel.

Oil prices went up on Thursday boosted by the unexpected decline of petrol stocks in the USA, despite the fact that crude oil supply still remains high. The US Administration of Energy reported on Wednesday that petrol stocks were reduced by 869 thousand barrels last week down to 256.2 mln barrels. A 1.1 mln barrel increase had been expected.

Wheat price went up in Chicago yesterday boosted by USDA’s February report. Wheat production is on the fall worldwide and stocks in the USA grow slower than expected. That was the accelerator yesterday. Wheat production was decreased upon the previous forecast, but it still remained record high. The biggest correction came from India. Wheat stocks went down 3.0 mln tons there.

Unchanged soybean stocks numbers in the USA came as a surprise. Everybody expected them to go down following the strong export. Everybody else, but not USDA. Soybean yield in Brazil was increased again, this time by Conab. USDA retained soybean yield in Brazil unchanged, but lowered the one in Argentina by 1.5 mln tons down to 55.5 mln tons. Other analysts project a much lower yield in Argentina.

Yesterday was full of numbers, so let us quote the more important ones.

USDA projected world wheat yield of 748.24 mln tons in the current season compared with 752.69 mln tons in the January forecast and 735.59 mln tons in 2015 – 2016. This sizeable decrease is mainly due to the decrease in India from 90 mln tons to 87 mln tons. Wheat ending stocks worldwide will be 248.61 mln tons (253.29 and 240.77); the result for India is 8 mln tons (11 and 14.54). Wheat stocks in the USA will be 31.01 mln tons (32.29 and 26.55).

World corn production will be 1,040.21 mln tons (1,037.93 and 960.73). There has been growth in Mexico from 24.5 mln tons to 26 mln tons as well as Ukraine from 27 mln tons to 28 mln tons. World corn stocks will be 217.56 mln tons (220.98 and 210.39). Stocks in China decrease drastically from 106.31 mln tons in the January forecast and 110.77 mln tons at the end of last season to 102.31 mln tons now. There has been a decrease in the USA too down to 58.93 mln tons (59.82 and 44.12).

World soybean production will be 336.62 mln tons (337.85 and 312.97). There has been decrease in Argentina from 57 mln tons to 55.5 mln tons. World soybean stocks will be 80.38 mln tons (82.32 and 77.19). Soybean stocks in Argentina decreased to 29.7 mln tons (31.8 and 31.95).

Brazil's State Agency Conab projected grain yield in Brazil at 219.1 mln tons in 2016 - 2017, which is 17.4% higher than the previous 2015 – 2016 MY. Grain yield will bounce back after last year's drought. Grain areas have grown by 2.1% to 59.5 mln tons. Soybean yield has reached record 105.6 mln tons, which is 1.8 mln tons higher than the January forecast. Corn production will be at a record level too – 87.4 mln tons, which is 1.8 mln tons higher than the January forecast. First corn harvest will be 28.8 mln tons and safrinha will be 58.5 mln tons.

Russian Ministry of Agriculture projected a grain yield of 100 mln tons in 2017. The expected export level in 2016 – 2017 is 37.5 mln tons. Russian Institute IKAR projected over 37.5 mln tons of grain will be exported from Russia in 2016 – 2017. 23 mln tons of grain have been exported between the beginning of season and now. At least 14.5 mln tons of grain more are to be exported from the country between February and June. Such a huge amount of grain has not been exported in the season so far, so the task is hard to complete.

The Russians have the difficult task of decreasing their grain stocks – mainly wheat. How are they going to achieve it? It will most likely happen by lowering the prices. Wheat yield forecast for 2017 reads 67.5 mln tons, which is an excellent result despite the 5.5 mln ton decline, especially keeping the enormous stocks in mind.

The USA exported 18.192 mln tons of corn in the first four months of the season, which started in September; this is a 76% increase on the same period of the previous season.

There is information on the market of China buying soybean from the USA. At least 4 soybean lots have been purchased, to be delivered in the summer of 2017. It was surprising to find out that the USA, not Brazil, was the supplier.

Wheat price – Wheat soared in Chicago yesterday. USDA projected wheat export of 28.5 mln tons from Russia, lowered by 0.5 mln tons from the previous forecast. Between January 27 and February 2, 2017, export wheat sales from the USA were 527,300 tons from the current harvest (+17% and +9%) and 16,300 tons from the new harvest. Export was 606,100 tons. Japan, Mexico, Chile, The Philippines and Morocco were the biggest buyers.

Soybean price – Soybean futures in Chicago went down by 6.25 – 8.25 cents/bushel yesterday. Weekly soybean sales from the USA were 536,300 tons + 129,300 tons. China, France and Mexico were the biggest buyers. Export was 1,641,800 tons. Soybean meal sales were 347,700 tons +1,000 tons. Soybean oil sales were 35,300 tons. USDA announced an export sale of 107,000 tons of soybean to an undisclosed destination.

Corn price – Corn futures in Chicago went down by 1.25 – 1.75 cents/bushel yesterday. Weekly soybean sales from the USA were 971,700 tons + 34,500 tons. Export was 1,124,700 tons. Japan, an unspecified buyer, Mexico and South Korea were the biggest buyers.

There have been very strong export grain sales from the USA. The market was overshadowed by the USDA report yesterday, but export reaction is on its way today.