Grains prices in Chicago plummeted on Thursday. Changes in Paris were minimal and in many directions.

The EUR/USD currency pair went up to 1.0660. Light oil increased to 53.34 USD/barrel.

Wheat price in Chicago went down yesterday despite the good news about last week’s wheat export from the USA – 569,100 tons versus the expected 300,000 – 500,000 tons.

Soft wheat export from the EU has reached the level of 15.5 mln tons since the beginning of the season, which is 8% less than the previous year. Strategie retained its forecast on season-long wheat yield in the EU at 143.8 mln tons.

The current climatic models still offer favourable conditions for grain growth in South America. The wettest areas in Brazil will not get any more rainfall and will dry up. Safrinha has had a powerful start.

Weekly corn export sales from the USA were 783,500 tons and soybean export was 890,000 tons.

A turning point in the forecast on reduced soybean yield in Argentina: all due to improving weather conditions. Considering the improved weather conditions in Argentina, Rosario Grain Stock Exchange increased its forecast for soybean yield in the country up to 54.5 mln tons versus 52 mln tons in its January estimate. Initial forecast on soybean yield in Argentina was at about 57 – 58 mln tons. There has been decline of only 3 mln tons, which is not much at all.

Temperatures in the Northern hemisphere are increasing and we will be waiting for the news from this part of the world. Wheat and corn prices in Paris have been slowly increasing for the past few weeks.

In the current season (April - March), wheat consumption in India may exceed 100 mln tons if official yield and import estimates are realistic. Indian Ministry of Agriculture reported that wheat yield in the country has been 92.29 mln tons so far in the season. Wheat beginning stocks are 14.5 mln tons, according to FCI. Traders report that import has reached 5.5 mln tons. Thus the total amount of wheat in the country is 122.2 mln tons. Wheat stocks in India on March 31, 2017 are projected at 8 – 10 mln tons. In case stocks are at the upper edge of the forecast (10 mln tons), yearly wheat consumption in India will rate at the staggering 102 mln tons. Wheat consumption in the country has been between 91 and 92 mln tons for the past few years. The wheat yield forecast is the weakest link in the analysis. Many analysts believe that yield is practically below 90 mln tons with USDA projecting 86 mln tons. Thus the new consumption calculations will be at 95.71 mln tons.

Wheat export from Ukraine decreased by 14% in January down to 1.2 mln tons. India was the main buyer with 780,000 tons or 64% of the whole amount. Registering February sales to India, 3 mln tons of wheat have been exported to this country since the start of the season. 12.72 mln tons of wheat were exported from Ukraine in the first seven months of 2016 - 2017, which is 16% more than the corresponding period of the previous year. Export will reach 15 – 16 mln tons over a season-long run. Excluding the export to India, the index will be 9.72 mln tons or 13% less than the export in 2015 – 2016. India will reduce wheat import in the next months. The country may reduce considerably the overall wheat import in case the forecast for a new record yield are confirmed. Thus demand for Black Sea wheat will be much weaker and prices lower. It appears India saved us this year from lower wheat prices.

Corn price – Corn futures in Chicago dropped by 4 – 5.25 cents/bushel yesterday. In the week between February 3 and February 9, corn export sales from the USA were 783,500 tons from the current harvest (-19% and -35%) and 285,200 tons from the new harvest. Export was 1,251,700 tons. Japan and Peru were the biggest corn buyers. Since the start of the season, corn export arrangements have reached 74% of USDA’s yearly forecast with an average of 70% in the past five years.

Wheat price – Wheat futures in Chicago dropped yesterday. Export wheat sales from the USA were 569,100 tons (+8% and +10%) + 19,500 tons. Export reached 389,100 tons. Unspecified buyer and Mexico were the biggest buyers.

Soybean price – Soybean futures in Chicago plummeted yesterday. Export soybean sales from the USA were 890,000 tons (+93% and +41%) + 207,400 tons. Export reached 1,138,100 tons. China, unspecified buyer and Germany were the biggest buyers. Soybean meal sales were 121,300 tons and soybean oil sales were 9,900 tons. Farmers in Brazilian state of Mato Grosso completed 56% of their new harvest.

American farmers have sold about 50% of their future soybean yield. Quick sale pace is due to the fast soybean harvesting in Brazil as well as high soybean prices in Chicago. Many American farmers have been selling their soybean at record tempo for the past 10 years and intend to increase the areas in 2017 – 2018.