All grain prices in Chicago went up on Wednesday with soybean in the lead again. The situation in Paris was similar with rapeseed on top.

The EUR/USD currency pair went down to 1.0550. Light oil decreased to 53.83 USD/barrel.

American shares price soared to the highest level in history and the bigger indices having their best day since the start of 2017 boosted by Donald Trump’s speech before the Congress.

Wheat price in Chicago was boosted yesterday by the big contract which Egypt signed on Tuesday. Corn is still on the rise matched by expectations for a strong biofuel consumption mandate.

GASC purchased the record high 535,000 tons of wheat. The company usually reduces its purchases at this time of the year, which precedes the upcoming harvesting campaign in the country. This, however, is not happening this year and purchases are very very intensive. They exceed considerably last year’s results. 5.14 mln tons of wheat have been bought since the start of the season versus 4.2 mln tons a year earlier. With the small exception of 240,000 tons (Argentinian and French wheat), the produce has been delivered from the Black Sea region. The high demand is due to low stocks and reduced speculation on wheat import by private companies with consequent sales to GASC at higher prices. Overall, Egypt is still increasing wheat consumption and import this season.

Russian wheat won the most contracts at the latest auctions in Egypt. This will certainly limit Russia’s resource to offer wheat aggressively at a low price. A fact worth mentioning is the current transportation of Russian wheat from the central parts of the country to the ports, because potential in the southern parts has been severely weakened – wheat has already been exported. Russian wheat price reduction is likely, but it will not be considerable during the active period of the current season.

At the auction in Egypt, France realized the first 120,000 tons of its wheat produce this season. Wheat price in Paris went up by +1.3% yesterday to 174.50 EUR/ton for the first time since July 2016. In December 2016, French wheat export to non-EU countries grew to 361,000 tons up from 233,000 tons in November. Obviously, France has something to offer on the market and it exceeds the analysts’ expectations.

It would be best if France and Russia reduced their reserves now and went into the new season with low ending stocks. Thus, the expected smaller yields in the USA, Ukraine, Russia and Australia will steady wheat price worldwide.

29.43 mln tons of grain were exported from Ukraine between the beginning of the 2016 – 2017 season and March 1, 2017. The export consisted of 13.56 mln tons of wheat, 4.66 mln tons of barley and 11.05 mln tons of corn. The country’s Ministry of Agriculture estimated that 39.487 mln tons of grain were exported from the country in the whole of 2015 – 2016, which is 13.5% more than 2014 – 2015. 40 mln tons of grain are expected to be exported during the current marketing year.

There have been speculations in the USA that the state administration will support the use of E15 petrol (15% ethanol). This type is currently available and can be used. However, the demand for it is very high. A dramatic change in the consumption of this fuel is quite unlikely within the same mandate, which means that hopes of big growth in corn consumption may remain just that for now. Changes regarding biodiesel will most likely include limitation of imported additives use for the production of biodiesel. The authorities aim to boost local production. The changes will mainly affect biodiesel suppliers in the USA.

Soybean harvesting and corn sowing continues in Brazil. В Бразилия продължава жътвата на соята и сеитбата на царевицата. 80% of soybean areas will have been harvested in Mato Grosso by Friday. The wet weather, however, has caused motorway traffic congestion and a large number of lorries loaded with soybean are stuck on their way to the ports.

Oil World reported that palm oil export from Indonesia and Malaysia reached 39.4 mln tons in 2016, which is a 4.6 mln tons decline on 2015. Export from Malaysia decreased by 1.4 mln tons while 3.2 mln tons less were exported from Indonesia. Export reduction comes as a result of the reduced production. Another reason for export decline is the higher palm oil consumption in Indonesia’s biodiesel industry +2.1 mln tons. The biggest palm oil delivery drop concerns the EU 5.68 mln tons (6.21) followed by India 8.25 mln tons (9.43) and China 4.61 mln tons (6.06). Reduced palm oil stocks in China and India have been reported. In 2016, African countries imported 5.51 mln tons (6.23) while Asian countries imported 25.07 mln tons (28.25).

That is what happened with palm oil in 2016. Those circumstances led to its prices going steadily up. Production will be restored in 2017, but not to the maximum. Two years of low production creates the opportunity for demand increase on the market which will eventually prevent future excess as well as lower the prices.

Soybean price – Soybean futures in Chicago went up by 15.75 – 16.25 cents/bushel yesterday. 4.64 mln tons of soybean were processed in the USA in January, which exceeded the estimates and was +6.3% higher than the amount processed in January 2016. Weekly export soybean sales in the USA are projected at about 300 – 500,000 tons of the current harvest + 0 + 200,000 tons of the new harvest. Soybean meal sales are estimated at about 125 – 300,000 tons while soybean oil sales will be 5 – 30,000 tons.

Corn price – Corn futures in Chicago went up by 9 cents/bushel yesterday. Export corn sales in the USA are projected at 700 – 900,000 tons of the current harvest + 150 – 350,000 tons of the new harvest. Ethanol production in the USA remained unchanged in the past week at 1.034 mln gallons daily. Ethanol stocks increased again, this time by 422,000 barrels per week to 23.091 mln barrels. In January, corn consumption for ethanol production in the USA was 12.098 mln tons, which is 0.49% higher than December and 7.28% more than January 2016.

Wheat price – Wheat futures in Chicago went up by 14.25 cents/bushel yesterday. Export wheat sales will be 300 – 500,000 tons + 100 – 300,000 tons. Japan purchased 85,417 tons of wheat from the USA and 27,750 tons from Australia. In February, Egypt bought 1.225 mln tons of wheat. Egypt announced that, following the latest wheat purchase, the country’s stocks will suffice to meet the domestic consumption for four months only.

In the past few weeks, wheat demand has been very high worldwide.