Grains prices in Chicago decreased on Monday with wheat being the top mover. The prices in Paris went down too with rapeseed making the biggest change.

The EUR/USD currency pair increased to 1.0869. Light oil went down to 47.61 USD/barrel.

The biggest Asian refinery – China Petroleum and Chemical Corp. – has been invited to invest into Saudi Arabian Oil Co and become a part of the biggest basic public supply in the world (IPO) which has been prepared by the oil giant from Riyadh.

American soybean futures reached a multi-month bottom level yesterday as the market is waiting for the announcement of huge soybean areas in the USA. Updated information on all grains sticks in the USA is expected too. The market is more than sure that farmers will sow enough areas of both corn and soybean.

The president of the USA has to fight fierce opposition from the legislators in his attempt to introduce measures for stimulation of the economy. If the plans are not realized, it will bring lower inflation pressure, which will lead to the perspective of higher grains prices.

Rainfall has finally appeared in the USA’s wheat belt which means that forecasts for crop worsening have been put on hold. Large areas of wheat got some rainfall – an average of 3 – 20 l/m² with 50 l/m² in some parts. This is the beginning of a change in the weather pattern. More rain is expected until the end of the week. There are some dry areas, but the rain has not stopped.

The big news in the soybean segment is the negative margins of soybean processors in China – 0.02 USD/bushel versus +0.09 USD/bushel at the end of last week and +0.30 USD/bushel a year earlier. South America has been acquiring larger and larger section of the sales now and the USA has undergone a period of decline. Now analysts are less likely to believe that the US presidential administration will take measures for the increase of biodiesel consumption.

The European Commission projects much higher EU wheat production in 2017 versus 2016. Crops suffered minimal damage during the winter and their condition is good now. The latest rainfall improves the humidity status in France, which was the reason for the weak 2016 wheat yield. Wheat in Russia suffered only below average damage during the winter. The situation in Ukraine is critical now and the weather conditions in the next few weeks will be vital for the size of the new yield. Soft wheat production in the EU in 2017 will be 6,020 kg/ha, which is 7.7% higher than 2016 and +3.0% higher than the average level for the past five years. The average wheat production in France will increase by 35%. Strategie projects an average soft wheat production in the EU of 6,000 kg/ha as the yield will be 143.9 mln tons. In 2017 – 2018 the EU will be a strong wheat exporter again and the main competitor for Russia and Ukraine on the Mediterranean markets. In the current season it was the Black Sea region wheat which increased its presence, but the tables will be turning in the new season. We hope that the new wheat yields in Russia and Ukraine will be substantially smaller than 2016 so that export pressure will be weaker and prices will be relatively good.

Between March 18 and March 26, 0.43 mln tons of grains were exported from Ukrainian sea ports versus 1.16 mln tons a week earlier. The export consisted of 79,300 tons of wheat, 346,400 tons of corn and 2,600 tons of barley.

Between March 17 and March 23, 561,600 tons of grains were exported from Russian sea ports versus 695,300 tons a week earlier. The export consisted of 477,600 tons of wheat, 81,300 tons of corn and 2,700 tons of barley.

A total of 991,600 tons of grain were exported from Russia and Ukraine in the past seven days versus 1,855,300 tons a week earlier. The total grains export from the two countries had not dropped below 1 million tons weekly. We are keeping an eye on wheat export from Ukraine, which holds very low levels again. The previous week was obviously an exception. In view of the deteriorating relations between Russia and Turkey as well as Ukraine being a weak wheat exporter, it is quite likely for Turkey to turn to Bulgaria and Romania for supply, that is buying the final remaining old yield stocks. This will happen in the next few weeks if it happens at all.

According to the Russian Ministry of Agriculture, 26.878 mln tons of grains were exported from the country between the start of the season and March 22, 2017 including 20.638 mln tons of wheat, 2.217 mln tons of barley and 3.831 mln tons of corn. The export tempo is 1.8% slower than the same period of 2015 – 2016 – 27.375 mln tons including +3% of wheat, +16.1% of corn and -41.8% of barley. The higher wheat beginning stocks in Russia are worrying, but they will be definitely available in the central parts of the country where logistics costs will not allow for cheap export.

Algeria has announced a new auction for wheat purchasing; we know that volumes here usually exceed 500,000 tons. Egypt announced that auctions for foreign wheat will be carried out in the country during the purchase campaign. Traditions were different in the past and export used to stop at the beginning of the campaign. We are looking forward to a couple of months when old yield wheat will be sold.

Corn price – Corn futures in Chicago decreased slightly yesterday. Export recap for the week ending on March 23, 2017 were 1,556,091 tons, which was +14.59% more than the previous week and +57.33% more than last year. Analysts expect that 2017 corn areas in the USA will reach 90.969 mln acres and corn stocks in the USA would be 216.76 mln tons as of March 1, 2017. The government of Mexico will look into possibility of a tax-free corn import from Brazil and Argentina.

Soybean price – Soybean futures in Chicago went down by 4.25 – 5.25 cents/bushel yesterday following the news of rainfall in Argentina. 2017 soybean areas in the USA are projected at 88.214 mln acres while stocks would be 45.80 mln tons as of March 1, 2017, which will be +9.99% more than the previous year. Weekly American soybean export recap is at 555,012 tons (-34.06% and -2.31%). According to information from AgRural, 68% of soybean areas in Brazil have been harvested, but Safras estimated 69%.

Wheat price – Wheat futures in Chicago went down by 2.75 cents/bushel yesterday. The condition of winter wheat in Kansas has remained unchanged compared with the previous week. 2017 wheat areas in the USA will be 46.139 mln acres including 32.554 mln acres of winter wheat while wheat stocks will be 44.25 mln tons as of March 1, 2017 – these are the market projections. Weekly American wheat export recap is at 541,799 tons (+54.01% on the previous week).