Wheat and soybean prices in Chicago remained steady on Tuesday while corn took a big dive. Wheat and corn decreased in Paris as rapeseed went up.

The EUR/USD index went up to 1.0669. Light oil went up to 50.33 USD/barrel.

Oil prices went up a bit on Tuesday due to the weak dollar, although the growth in Libyan production had put the market under pressure. It was clear on Monday that Libya had resumed extracting at its biggest oil field – El Sharara, after the authorities convinced armed rebels to cancel the blockade of the site.

Corn futures in Chicago took a big drop yesterday. Over the previous few days, investors had been buying corn and selling soybeans leaving aside wheat to some extent. However, corn took a step back to compensate that. Spring crop prices were slightly boosted by the news of expected rainfall in the next few days, which will delay field work. Corn sowing in the South of the USA is running at a very fast pace.

Over the past week, the good amount of rainfall in the wheat belt of the USA facilitated the good wheat condition in the next few weeks.

February soybean processing in the USA was 4.11 mln tons versus market expectations of 4.13 mln tons. The index is 2.3% lower than processing the index in February 2016.

Dry spots are found in certain areas of Brazil and they slow down the safrinha development. Rainfall is expected around the middle of the month and they will change the situation. Another trend in Brazil is the fading of the consequences of the meat scandal on its consumption and export which in its turn will affect the consumption of grains and fodder. Safras analysts increased their forecast on soybean yield in Brazil by +3 mln tons versus the previous one up to 111 mln tons. Forecasts on soybean yield in Brazil generally exceed 110 mln tons. Brazilian Ministry of Agriculture reported that 9.7 mln tons of soybeans were exported from the country in March, which is a record level for this month of the year.

Between 1.076 and 1.089 mln tons of palm oil were exported from Malaysia in March, which is 6.8 - 6.9% less than February.

European Commission experts predict significant decline in grain production in Romania in 2017. Preliminary reports on wheat production show that it will be lower than 2016 by 7.4%, barley will be 11% down and rapeseed will drop by 9.2%. Romanian farmers confirmed this forecast as realistic and stated that there will be "a slight wheat problem". Romanian has sold to Egyptian company GASC 1.92 mln tons of wheat since the start of the season, which is a share of 17.3% of all purchases of the company. This news should be compared with:

-The condition of the yield and ending stocks in Russia – the new wheat yield will drop by approximately 5 – 6 mln tons according to current estimates. Nationwide wheat stocks, however, will be high – about 12 mln tons. Russia will obviously keep a neutral position as far as the rise in wheat price at the start of the new season is concerned. It is good to keep in mind that most reserves are strictly inland, which pushes their export price up.

- The condition of wheat yield and ending stocks in Ukraine. The situation here is more optimistic. The new yield will be about 2 mln tons lower. Stocks, however, have been exhausted by the strong export. Ukraine will boost the wheat price growth.

-France – stocks will reach average level despite the weak 2016 yield. Current export is not strong either, though. Wheat yield is expected to be as high as over 37 mln tons. France will determine lower prices.

-The USA – with an estimated new yield of 50 mln tons, the country will be the main reason for price rise.

The current situation will definitely be sensitive to drought in some of the production regions mentioned above. A little push is needed for the prices to start soaring.

On 6.04.2017 Algeria announced an auction for the purchase of at least 50,000 tons of random origin and June delivery. In the previous auction on15.03.2017, 480,000 tons of wheat was bought at 204 – 206 USD/ton C&F. As we know, Algeria buys lots of 300,000 – 600,000 tons of wheat at a time. North African countries have definitely jumped outside their limit since the start of this season.

Wheat price – Wheat futures in Chicago remained steady yesterday. In the key regions – Kansas, Texas, Oklahoma and Colorado - crop condition has become better following some rainfall. Analysts expect wheat yield in India will reach 98 mln tons.

Corn price – Corn futures in Chicago went down yesterday. 45% of the planned corn areas in Texas have been sowed versus 41% a year earlier. Only 243,003 tons of corns were exported from Brazil in March versus 2.02 mln tons in March 2016. Over the month, ethanol export was 53.88 mln litres versus 207.1 mln litres a year earlier. Celeres estimate corn yield in Brazil at 97.71 mln tons while INTL FCStone go for 93.3 mln tons. There is a big difference between the forecasts but the average index of 95 mln tons is very very high.

Soybean price – Soybean futures in Chicago remained steady yesterday. Abundant rainfall in parts of Argentina threaten soybean yield as crops may get flooded in some parts. Safras estimates soybean yield in Brazil at 111.5 mln tons while INTL FCStone predicts 111.6 mln tons.