Wheat and corn prices in Chicago remained steady yesterday while soybean price went down. Prices in Paris took a slight drop.

The EUR/USD currency pair went down to 1.0756. Light oil went up to 49.44 USD/barrel.

Oil prices kept on rising on Wednesday and prices were boosted by issues with the delivery to Libya as well as the expectations that the OPEC agreement for production reduction would be extended after the end of June.

Nothing interesting happened on the markets yesterday. Everything has frozen in anticipation of the information on areas and stocks sizes in the USA, which will be published on Friday. Nothing is going on but waiting.

No bad news has come in from South America, so bigger yields are expected.

Last year, USDA’s forecast published on March 31, 2016 included information of 90 mln acres of corn areas in the USA. Eventually, 93.6 mln acres of corn were sowed. Back then, corn prices quickly dropped, but the market found some arguments to push them up again. Will the pattern be repeated this year even if areas are bigger than expected? Just like last year, analysts expect a big decline in corn areas at the expense of soybean areas growth. We can hardly prefer a bear position on the future corn price. Corn demand is very good worldwide and areas are likely to decrease. The rule that you can ease low prices using low prices can come into full force this year round. Last year’s corn and soybean production in the USA was record high with a big growth on 2015. Last year’s corn price advantage following the good weather was considered very high and eventually record production was achieved. Do we expect excellent weather and still bigger production this year too? Clearly not! We can surely put our money on lower corn and soybean production in the USA which will lead to steadier prices. Bigger growth will depend on the yields in South America in the beginning of 2017.

A few days ago, Turkey introduced a tax on imported Russian grains in the country. Markets expected a quick solution to the problem, but this is not happening at the moment. Russian administration, as usual, is quite slow with the response and Turkey does not change its position easily. Information appeared in the Russian press of the country ready to find new markets for its produce and Iran was mentioned as a wheat buyer. Well, Iran has produced more than they can consume for the past two years. This is no longer the fairy tale from about 4 or 5 years ago. Back in 2016 Iran had 400,000 tons of wheat to export, but did not find a buyer. What is happening at Russian ports now? A part of the lots are being returned to their producers with various motives. Transport is not organized towards the ports. Both farmers and traders are confused and they can only see grim future ahead of them. In a situation like this Turkey usually starts buying large wheat lots from the USA.

Wheat market has been quite active for the past few days. Its dynamics are still good. Tunisia, Iraq, the Philippines, Algeria and Japan are either looking for wheat or have already signed ones. It looks as if everybody is trying to purchase cheaper Russian wheat following the issues between Russia and Turkey.

Generally speaking of the past few days, we can assume that the start of the new wheat season is quite optimistic. Lower yields are expected even in the Black Sea region which will lead to higher prices.

Wheat price – Wheat futures in Chicago increased a little yesterday. Weekly export American wheat sales are estimated at 250,000 – 450,000 tons from the old yield and 50,000 – 200,000 tons from the new yield. On Tuesday, Algeria bought 200,000 tons of hard wheat from the USA or Canada with a May delivery. Traditionally, Algeria does not buy American or Canadian wheat, but this time there was no competitive supply from neither France, nor Russia.

Corn price – Corn futures in Chicago were steady yesterday. Weekly export American corn sales are estimated at 900,000 – 1,200,000 tons + 100,000 – 300,000 tons. American FOB prices can compete with those from South America now. Ethanol production in the USA grew by 10,000 barrels daily last week up to 1.054 mln barrels daily. This has been the highest daily production since the beginning of February. Ethanol stocks in the USA grew rapidly by 662,000 barrels in the week up to 23.257 mln barrels.

Soybean price – Soybean futures in Chicago went down by 2.75 – 3.25 cents/bushel yesterday. Weekly export American soybean sales are estimated between 350,000 and 550,000 tons + 100,000 – 300,000 tons; soybean meal numbers are 100,000 – 300,000 tons + 0 – 100,000 tons and soybean oil numbers are 0 – 30,000 tons.