All grains prices in Chicago decreased significantly on Thursday. There was a slight price decline in Paris.

The EUR/USD index went down to 1.0647. Light oil went up to 51.60 USD/barrel.

Wednesday evening saw the Energy Information Administration (EIA) announce that US reserves had increased by 1.57 mln barrels over the previous week up to 535.5 mln barrels. Production in the USA has increased by 52,000 barrels daily up to 9.2 mln barrels daily, which is a 9% growth since mid-2016.

Wheat price in Chicago went down despite good news of export sales and expectations of a weak new yield. Between March 24 and March 30, American wheat export sales were 568,400 tons from yield 2016 – 2017. Market expectations had been for 250,000 – 450,000 tons. Sales are above the average needed for the completion of USDA’s forecast on annual export. The question now is whether the sold amount of wheat will be exported within the next 9 weeks before the end of the season or they will remain for the next season. There are expectations for larger lots to be rescheduled for 2017 – 2018 export. Export tempo is not very fast now. Over the week, 564,900 tons were exported versus 783,360 tons weekly necessary for the completion of the forecast of 27.88 mln tons. There is still a large amount of wheat, which has been purchased but not paid yet. The amount is currently 5.97 mln tons, which is the highest level for the past 6 years. USDA is likely to decrease its forecast on wheat export in their new report. The market is also under pressure from the lower new wheat yield as well as the price levels at the start of the trade. There are fears that they will be equal or higher than the current ones. Wheat export from the EU has reached 18.3 mln tons since the start of the season, which is 18% lower than last year. Export was 237,000 tons in the previous week alone.

Over the week, American corn export sales were 1,138,100 tons, which is an excellent result, but nevertheless, the price went down.

Soybean sales are at the upper end of the margin – 482,000 tons, but this is 11% less than the average level for the past 4 weeks. Soybean meal sales are very good, too – 229,100 tons.

On Wednesday, soybean price in Chicago was boosted by expected floods in Argentina, but Thursday made this expectation melt like snow in spring. Dry weather in the country next week will let corn and soybean harvest to advance quickly. Only 8% of soybean areas in Argentina were harvested at the start of the week versus 13% a year earlier. 11% of corn areas (13%) have been harvested.

Between 1.03.2017 and now, soybean May contract in Chicago has decreased in price by 1.1 USD/bushel. This was caused by the ever growing predictions on soybean harvest in South America as well as the large soybean areas expected in the USA in 2017. In mid-term, we can expect soybean to be boosted on the market, but in the long term things do not look bright. A large new soybean yield in the USA (over 110 mln tons) will certainly bring the price down. However, our closest friend – the weather – will probably be less generous with the crops in the USA in the new season.

The Ministry of Agriculture of Saudi Arabia estimates that the country’s corn import in 2017 – 2018 will increase by 400,000 tons to 4.3 mln tons. The demand for barley in the country is declining, which will be 8 mln tons in the new season. The decline in barley demand causes an increase in wheat fodder consumption. Over the current season, Saudi Arabia will increase wheat import by 19% versus the previous season to 3.5 mln tons. Import growth will remain in the new season, too, according to the latest FAS USDA forecast. In 2017 – 2018 MY, wheat import in the country will reach 3.7 mln tons. Saudi Arabia used to be the biggest wheat importer in the world with the lots delivered mainly from the Black Sea region. This tradition is obviously changing now.

This is the news from yesterday. Markets are gradually preparing for USDA’s April report, which will be issued next Tuesday.

Soybean price – Soybean futures in Chicago went down by 2.5 – 3.5 cents/bushel yesterday. American soybean export sales between March 24 and March 30 were 482,000 tons of old harvest (-29.2% lower than last week, but +14.7% higher than the previous year) + 395,000 tons of new harvest (-25.2% versus the previous week). Soybean export was 754,862 tons (-20.7% versus the previous week). China was the biggest buyer. Soybean oil sales were 22,400 tons while soybean meal sales were 229,100 tons + 2,800 tons.   

Wheat price – Wheat futures in Chicago went down by 6.5 cents/bushel yesterday. American wheat export sales were 568,394 tons (+22.5% and much bigger than last year’s decline) + 87,000 tons (-46-8%). American wheat weekly export was 564,943 tons (+14%). An unspecified buyer, Taiwan and Algeria were the biggest buyers.

Corn price – Corn futures in Chicago went down by 3.25 – 4 cents/bushel yesterday. American corn export sales were 1,138,085 tons (+58.76% and +20.41%) + 34,594 tons. Export was 1,597,672 tons (+13.9% versus last week). American corn export contracts are 49% bigger than last year.