Corn and soybean prices in Chicago had a slight increase on Thursday while wheat price remained steady. Rapeseed price in Paris decreased considerably as wheat price remained unchanged and corn price had a slight increase.

The EUR/USD currency pair increased to 1.0732. Light oil increased to 48.70 USD/barrel.

“China does not want a trade war with the USA”, declared China’s Prime Minister Li Keqiang describing himself as an optimist about the relations between the two countries. “A war trade will not make our trade fairer”, he added during a press conference after the end of the annual session of the Chinese Parliament.

The American currency’s price went down yesterday, but the weak export sales weakened the wheat, which had been strong for the past few days. Despite FED lowering interest rates in the USA, this was a foreseeable move so profit was made.

The export sales of corn from the USA are still intensive. In the week between March 3 and March 9 they reached 1,264,400 tons from the current yield and 218,100 tons from the new yield. This largely exceeds the market estimates for 700 – 1,000,000 tons.

Soybean sales were 471,600 tons + 225,800 tons, which corresponds to market estimates. These sales keep soybean price in Chicago at 10 USD/bushel despite the constant growth of forecasts for the yield in South America.

Wheat was further boosted by Egypt’s big purchase. Wheat in the USA is currently the cheapest on the market and demand for it should be high enough. The big exporters have still got a lot of old yield wheat and they are trying to sell it quickly. Export sales of wheat from the USA are at 264,400 tons + 74,200 tons – at the lower end of the estimates.

Here are the latest purchases or offers on the market:

1. On March 15, 2017 Algeria bought 480,000 tons of wheat of unspecified origin at 204 – 206 USD/ton C&F to be delivered in May.

2. On March 15, 2017 private Israeli importers bought 40,000 tons of corn at 181.9 USD/ton C&F. The wheat and barley purchase was cancelled.

3. Saudi Arabia has announced an auction for the purchase of 1.5 mln tons of barley fodder to be delivered in May and June.

4. Japan purchased 146,500 tons of milling wheat from the USA and Canada to be delivered between April 21 and June 20, 2017.

5. On March 15, 2017 Egyptian State Company GASC bought 415,000 tons of wheat from Russia, Ukraine and France to be delivered between April 15 and April 25.

GASC has already purchased over 5.5 mln tons of wheat since the start of the season. Jordan and the Philippines are on the market too.

Wheat demand remains very high and it is quite likely to remain so until June.

Ethanol production in the USA remains intensive. Oil decline has not affected the ethanol to a large extent. Stocks in the USA have increased, but producers’ margins are still good. Producers’ margins were low in 2015, but ethanol production was on the rise. DDGS export from the USA has been rising for the past few weeks, which increases the possibility for the branch to remain steady. Corn demand in the USA keeps a good tempo and will ensure that the market will preserve the current corn prices. Corn is currently hard to buy in Europe. Moreover, Ukraine supplies the market only with limited volumes.

According to information from market operators, farmers in Argentina will start soybean harvesting in two weeks’ time. First yield soybean is now ripening. High production volumes are expected especially in the central and northern parts of the country. Lower production is expected in the areas which were flooded a month ago. Yield is projected between 55.8 and 57 mln tons. Soybean sales have dropped as a result of the lower soybean price in Argentina. Soybean meal is currently sold in bigger volumes and its export peak is expected in May, June and July. 80% of the old soybean yield has been sold while the new one has only sold 6%.

In its March report, Strategie Grains Agency increased its forecast on wheat and barley yields in the EU in 2017, but reduced the corn forecast. 143.9 mln tons of soft wheat will be harvested in the EU in 2017, which is 100,000 tons more than the February forecast and 6% more than the 2016 yield. Barley yield is expected at 61.4 mln tons, which is 100,000 tons more than the February forecast and 2% more than the 2016 yield. Corn yield will be 60.5 mln tons (-900,000 tons and 59.7 mln tons). The reduction is due to the smaller corn areas in Germany, Belgium, Luxemburg, France, Italy and Bulgaria.