Soybean and wheat prices in Chicago went down on Tuesday while corn took a slight rise. Rapeseed decreased considerably in Paris. Wheat and corn remained relatively steady.

The EUR/USD currency pair went down to 1.0542. Light oil increased to 54.60 USD/barrel.

Reuters reported a price increase on the oil futures for a second day in a row. Information from Friday showed that the long positions on the oil futures and options reached the highest level in history during the week prior February 14.

The fast soybean harvesting in Brazil put pressure on soybean futures in Chicago yesterday. Meanwhile, corn was boosted by strong demand. 25% of soybean areas in Brazil have been harvested, which is 7% more than last year. 52% of the areas in the state of Mato Grosso have been harvested versus 33% a year earlier. New rainfall is expected in the country, which will hamper the campaign. Soybean yield is still high with just a few exceptions for areas where grain quality is poorer. Rain has decreased the grain quality in very few areas.

There are fears of abundant rain in Argentina this week. Rain will decrease next week and the temperatures will be above average. However, rain in Argentina may turn out to be more than just a nuisance and a re-run of last year is not totally unlikely, so the big rainfall might decrease the soybean yield.

In January, corn export from Brazil went down to 1.45 mln tons, which is 66% less than January 2016. 1.898 mln tons of soybean were exported from Brazil in the first 13 days of February, which is 36.2% more than the same period of 2016. The total export worth was 767.7 mln USD.

USDA reported an export sale of 269,296 tons of corn to Japan, including 105,704 tons from the new yield. There has also been an export sale of 111,200 tons of corn from the current yield to an unspecified destination. The total amount of sales was 381 thousand tons, which is a very good result for a single day.

China and Japan finally struck a deal for the delivery of 30,000 tons of Chinese corn. A number of market observers believe that China will be exporting 200 – 300,000 tons of corn more. This is the result of the Chinese market being inundated with corn.

Wheat futures in Chicago went down yesterday. This coincided with USDA’s announcement of an export sale of 138,650 tons of wheat to an unspecified buyer, including 46,000 tons from the new yield.

The rise in the price of the Russian ruble keeps holding down the country’s wheat export. Rusagrotrans lowered its forecast on February and March export. On the whole, the annual wheat export from Russia is expected at about 27 mln tons versus the previous forecast of 28 mln tons.

South Korean association for fodder production KFA has announced an auction for the purchase of 50 – 65,000 tons of corn with random origin. Philippine millers have purchased 54,000 tons of milling wheat from Australia to be delivered in June or July. Australian white wheat is currently being sold at 205 – 210 USD/ton FOB The Philippines. Indonesian importers have already fulfilled with Australian wheat half of their consumption for the months prior May. In January, India received 1 mln tons of Australian and Ukrainian wheat.  600 – 700,000 tons of wheat more are expected to be delivered in India before the end of February.

The good quality, low prices and transport fares have made Australian wheat the favourite at the Asian markets.

The Black Sea region keeps buyers interested, too. On February 22, 2017 Libya will carry out an auction for the purchase of 100,000 tons of milling wheat, 50,000 tons of hard wheat, 75,000 tons of corn and 75,000 tons of barley fodder to be delivered in May. Ethiopia has purchased 400,000 tons of random origin wheat at 225.1 – 227.85 USD/ton C&F.

Spring wheat areas in Canada will grow by 3% versus last year compared with the previous forecast of 4%. Thus, the total wheat areas in the country will be 91.5 mln decares (93.3 mln decares expected last month). So, wheat yield in 2017 will be 28.6 mln tons, which will mark a 3.12 mln tons decline on 2016 and a 0.5 mln tons drop on the previous forecast in January. In the current season, wheat export from Canada remains unchanged at 21.3 mln tons with a soft wheat export decline of 300,000 tons and the same level of growth of the hard wheat. This season’s rapeseed ending stocks in Canada have been reduced to 0.8 mln tons with 1.1 mln tons in the January forecast. So, the rapeseed stock/demand ratio is only 5.9%. New yield rapeseed areas in Canada have grown by 3% to 85 mln decares. The yield will be 18 mln tons with a record of 18.6 mln tons back in 2013 – 2014.

The Indian government is about to reintroduce an import tax on wheat, so that the country’s farmers are protected. The tax was lowered from 10% to 0% on December 8, 2017. Official information states that wheat yield in the country was 92.29 mln tons in the previous year with independent analysts calculating a much lower figure. A yield of 96.64 mln tons is expected this year. The government will purchase 33 mln tons of wheat from the farmers versus only 22.96 mln tons last year. On February 1, 2017, wheat stocks in India were 11.2 mln tons. On April 1, 2017 stocks will be 7.0 mln tons, which is lower than the regulated buffer stocks of 7.5 mln tons.

There is huge demand for corn worldwide. The record corn yield in 2016 currently meets this demand, but some tension is also detected. Purchases from the USA are still very intensive despite the good news of the new yields in Brazil and Argentina. We are probably witnessing a break in the 5-year trend of constant grain price decline. The autumn of 2017 will tell whether there is any truth in this assumption. The situation with soybean and wheat is quite similar.

Wheat price – Wheat futures in Chicago dropped by 4 – 5 cents/bushel yesterday. Weekly American wheat export checks are 558,252 tons (+71.88% and +107%). SovEkon projects wheat export from Russia will be 1.5 mln tons lower than its previous forecast.

Soybean price – Soybean futures in Chicago dropped by 6 cents/bushel yesterday. Weekly American soybean export checks are 1.076 mln tons (-6.4% and -43.5%). Since the start of the season, checks have been 5.25 mln tons higher than last year.

Corn price – Corn futures in Chicago increased by 1 cents/bushel yesterday. American soybean export checks are 1,152,233 tons (-9% and +26.78%).