Grains prices in Chicago went down again on Thursday with soybean being the top mover. Rapeseed and wheat went down in Paris while corn went slightly up.

The EUR/USD currency pair went down to 1.0784. Light oil increased to 47.75 USD/barrel.

Greg McKenna, chief market strategist at AxiTrader, reported that OPEC practically guaranteed the investment plans and recovery of their competitors in the American schist industry. He claims that oil prices could go further down because of the high production in the USA as well as the fact that some OPEC producers do not follow the agreement on production reduction.

The good news of grain export from the USA did not change the market trend and prices went down again. Investors are looking forward to the information on grains areas in the USA in 2017, which will be out at the end of March. The market remains affected by the already harvested corn and soybean yields in South America as well as the oncoming rain in the USA’s wheat belt. The market has also been affected by the bird flu raging in various parts of the world and the scandal with meat export from Brazil.

Weekly export sales from the USA have been better than expected. For corn they were 1.347 mln tons (900,000 – 1,200,000), for soybean 738,000 tons (350,000 – 550,000) and for wheat 419,000 tons – at the upper end of the forecast. Since the start of the season, the total American wheat sales have been 36.1% higher than last year’s level (36.7% a week earlier). We must keep in mind that new harvest wheat sales have been weaker since the start of the current season. Up to March 16, 2017,  1.063 mln tons of the new wheat were sold, which was 9% less than last year.

INTL FCStone projected the 2017 soybean areas in the USA at 87.3 mln acres (83.4 mln acres last year) with 91.6 mln acres of corn.

Buenos Aires Grain Stock Exchange projected a yield of 56.5 mln tons of soybean in Argentina during the season which is 1.7 mln tons increase on the previous forecast. The floods in Argentina at the end of 2016 will definitely have little effect on the yield because the rainfall boosted the remaining unflooded crops. Corn deliveries to Argentinian ports are now running record high.

Long-term weather forecast predicted a warmer than usual spring in USA’s Midwest, which is related with smaller rainfall.

SovEcon analysts lowered their estimate on grain yield in Russia in 2017 to 109.5 mln tons with a previous forecast of 112.5 mln tons. Wheat yield will be 62.5 mln tons (73.3).

Soybean import in China was 7.5 mln tons in February, which was a 4% drop versus February 2016. According to information from the Chinese National Information Centre for Grains and Oilseeds, grain import in the country grew rapidly in the past month. During the past month, wheat import grew by 16% versus February 2016 up to 229,500 tons including 128,800 tons from Australia, 64,100 tons from Canada, 26,100 tons from Kazakhstan and 10,400 tons from the USA. Corn import reached 142,600 tons (+29%) including 136,900 tons from Ukraine. Barley import grew by over 1,005 up to 806,500 tons including 708,000 tons from Australia and 96,000 tons from Canada.

Rabobank analysts decreased the forecast on palm oil price in Malaysia for the second quarter of 2017 to an average level of 621.4 USD/ton. The decrease is due to higher palm oil production in Indonesia and Malaysia. The February growth in Malaysia was +20.7% on February 2016.

Meat problems in Brazil may affect corn and soybean meal consumption in the country to a large extent. Brazil will be ready to export more of the two commodities and will eventually ruin the expected balance worldwide.

The changes in grains areas in the USA are not as significant as the rainfall we expect in the next few months. Lower yield levels are estimated in various parts of the world as a result of reduced production in 2017 compared with previous years. Wheat yield in Russia is very important but it is quite likely it will be far lower than the current year. It is true that wheat ending stocks will be high, but they will not be in the Southern parts of the country.

Corn price – Corn futures in Chicago went down by 2 cents/bushel yesterday despite the excellent export sales. Between March 10 and March 16, American corn export sales were 1,347,016 tons from the current harvest (+11% versus last week and +59% versus the average level for the past four weeks) + 127,100 tons from the new harvest. Weekly corn export was 1,382,200 tons. South Korea, Japan, Mexico and Saudi Arabia were the biggest buyers. 8.1% of corn areas in Argentina have been harvested. In February, DDGS import in China was 68,860 tons, which was a 61.9% drop versus last year.

Soybean price – Soybean futures in Chicago went down by 6.75 – 8.75 cents/bushel yesterday. This has been the lowest price on May contract since mid-October 2016. American soybean export sales were 738,169 tons from the old harvest (+56.6% versus last week and +79.7% versus last year) + 79,902 tons from the new harvest. Export was 575,900 tons. China, the Netherlands, an unspecified buyer and Mexico were the biggest buyers. Soybean meal sales were 134,337 tons + 26,600 tons while soybean oil sales were 15,300 tons. The USA will conduct an investigation into subsidized biodiesel import from Argentina and Indonesia. 5.54 mln tons of soybean were imported in China in February.

Wheat price – Wheat futures in Chicago went down by 1.25 – 2.5 cents/bushel yesterday. American wheat export sales were 418,477 tons (+58.2% and +113.4%) + 149,790 tons. Export was 648,700 tons. Japan and Algeria were the biggest buyers.