Grains in Chicago were up on Wednesday with soybeans being at the top of the list. Rapeseed made a big jump upwards as wheat and corn remained steady.

The EUR/USD index remained steady at 1.0670. Light oil went up to 50.98 USD/barrel.

Oil keeps rising to a nearly monthly peak due to signals of a gradual exhaustion of the global reserves, Reuters reported. The direct reason for the dynamics was the unplanned production interruption in the North Sea.

Soybeans stopped the long losing streak in Chicago yesterday as it took a moderate increase. Soybeans decreased in nine of the last ten trading sessions. There has been rain and floods in Argentina. Rain is also expected in the southern parts of the country over the following week. This looks like a re-run of last year’s scenario when pre-harvest floods decreased the yield and deteriorated its quality. Rainfall has slowed down soybean and corn harvesting in the country.

Chinese buyers are back on the market following a two-day break, so prices might get moving. Soybeans were partially boosted by the high prices of palm oil.

According to a CIMB report, in March 2017 palm oil stocks in Malaysia keep declining – this time by 2% versus the previous month to 1.43 mln tons. The decline was the result of the active oil export. Analysts doubt Malaysia’s potential to restore palm oil stocks very quickly. The EU issued a resolution which will restrict palm oil import. The EU is the second biggest market for Malaysia produce. 2.059 mln tons of palm oil from Malaysia were imported in the EU in 2016, 30% of which has been used for biodiesel production. These changes in the EU may affect sunflower oil consumption by pushing it up.

Corn prices in Chicago went up yesterday. The growth was achieved despite analysts’ forecasts that low soybean prices will make some farmers in the USA turn their eyes to corn again just before sowing has started. USDA’s prediction on grains areas fragmentation will definitely not come true, so the changes will see the corn move up and soybeans move down. Rainfall in the USA is expected before April 15. Corn sowing will be delayed. To make a precise calculation of the campaign development we should remember that if conditions are favourable, American farmers can sow 7 – 8% of the planned corn areas every day. Thus, crops will be sowed before May 1^st.

Last week’s ethanol production in the USA decreased by 35,000 barrels daily down to 1.02 mln barrels. Over the week, ethanol stocks grew by 448,000 barrels to 23.71 mln barrels, which is a record high level. 2.8 litres of ethanol were produced from 1 bushel of corn. Over the week, slightly less than 2.72 mln tons of corn were used for ethanol production. We have reached the point when ethanol production in the USA has to be reduced – the market, that is the export cannot make use of it. This will lead to limited corn consumption. We cannot assume that corn consumption for ethanol production will decrease significantly, but still it will not keep its high level.

Over the current season, the Russian Ruble is the driving force behind the wheat price growth worldwide. The 2016 Ruble/US dollar ratio was 86 rubles/dollar. The current rate is 56 rubles/dollar. This growth has made wheat export from Russia rather uncompetitive while at the same time, taking advantage of the situation, other exporters increased their export at higher prices. Despite relations between Turkey and Russia being in dire straits, Russian wheat export to Turkey has nearly kept its level from last year. Winterkill caused minimal damage to wheat crops in Russia – far lower than the usual level. This happened in previous years too, when wheat yields in the country reached higher and higher record levels. The ruble price going up has taken a lot of pressure off the rest of the world wheat exporters. The current forecast on the new wheat yield in the USA is about 50 mln tons – much less the current yield. A few days ago, UkrAgroConsult decreased its forecast on the 2017 wheat yield in Ukraine by 700,000 tons to 24.2 mln tons. Wheat demand worldwide has remained very high – Algeria has become the newest big buyer. 2.33 mln tons of wheat were exported from the USA in February versus 1.6 mln tons a year earlier.

As far as soybeans are concerned – there is some disturbance on the market following the predictions of growing South American yields. Brazil has beaten its own record several times over since the beginning of this year. The same goes for Argentina where it seems the expected losses will not come to fruition. About corn – more rainfall is necessary for the completion of the large second corn yield in the USA. The situation is still to be solved and there are lots of questions which await their answers.

Here is an interesting fact - 27.9 mln tons of corn have been exported from the USA for the first six months of the current season (which started in September), which is 75% more than the same period of last year.

Soybean price – Soybean futures in Chicago grew by 4 – 6.75 cents/bushel yesterday. American soybean export sales are predicted at 350,000 – 550,000 tons from the old yield and 150,000 – 350,000 tons from the new yield. Soybean meal sales will be 100,000 – 300,000 tons while 5,000 – 20,000 tons of soybean oil will be sold.

Wheat price – Wheat futures in Chicago grew by 1 – 3.25 cents/bushel yesterday. American wheat export sales will be between 250,000 and 450,000 tons + 50,000 – 250,000 tons. Informa expects the average winter wheat production in the USA will be 47.7 bushels/acre as wheat yield will be 34.95 mln tons (-30.12% versus the previous year).

Corn price – Corn futures in Chicago grew by 1.5 – 3.75 cents/bushel yesterday. American corn export sales will be between 700,000 and 1,000,000 tons + 100,000 – 300,000 tons.