Wheat price in Chicago went up on Tuesday while corn and soybeans took a slight drop. All grains prices in Paris decreased.

The EUR/USD index remained steady at 1.0608. Light oil went up to 53.27 USD/barrels.

Saudi Arabia limited its petroleum production in March to its lowest level since January. Thus, the country’s production dropped below the promised level, negotiated in the OPEC agreement for production reduction, Bloomberg reported quoting their own anonymous source.

Yesterday, USDA issued their April report on the grains balance in the world. Here are the most important points in it:

1. Wheat – The 2016 – 2017 yield will be 751.36 mln tons versus 751.07 mln tons in the March forecast and 735.23 mln tons in 2015 – 2016. Wheat ending stocks will be 252.26 mln tons (249.94 and 241.74). The growth in ending stocks comes from Australia, Canada, Russia, India and the USA – each of them with their own share.

2. Corn – The yield will be 1,053.76 mln tons (1,049.24 and 963.32). Production growth comes from Argentina - 1 mln tons, Brazil 2 mln tons and Mexico 1 mln tons. Corn stocks will be 222.98 mln tons (220.68 and 211.83). There is growth in Brazil and Mexico.

3. Soybeans – Soybean production will be 345.97 mln tons (340.79 and 313.02). The growth comes from Brazil +3 mln tons to 111 mln tons, Argentina +0.5 mln tons and Paraguay +1 mln tons. World soybean ending stocks will be 87.41 mln tons (82.82 and 77.13). The growth comes from Argentina, Brazil and the USA.

Everything is going up, especially stocks, soybeans in particular. There have been no forecasts on the 2017 – 2018 balance yet. Everybody is hoping there will big decrease from the traditionally high yields in that area.

Brazilian agency Conab increased its forecasts on corn and soybean yields in the country thanks to the good weather conditions. The safrinha forecast has been increased by 1.94 mln tons to 61.61 mln tons. High yields are expected despite the late sowing of some of the crops. Corn yield in Mato Grosso will be 24.2 mln tons (+780,000). The average corn production in the state is estimated at 5,680 kg/hectare versus 4,000 kg/hectare during 2015 – 2016, which makes a 42% growth. The yield in Parana has been reduced by 500,000 tons to 12.67 mln tons. The forecast on soybean yield has been increased by 2.54 mln tons to 110.2 mln tons. The biggest forecast increase has been made for the state of Rio Grande de Sul - +1.67 mln tons. Other analysts’ forecasts are for up to 113 mln tons.

So far we have seen a lot of numbers, a lot of forecasts, all of which suggest big increase in all areas. The market seems complicated now because of the big changes.

According to a FAS USDA forecast, the new season wheat yield in Turkey will be 18 mln tons (17.25 mln tons in the current season), barley yield will be 5.5 mln tons (4.75) and corn yield will be 5.5 mln tons (5.5). In 2017 – 2018, wheat import in the country will be 4.5 mln tons (4.0), corn import will be 1.5 mln tons (1.0) and barley import will be 0.2 mln tons (0.2).

The El Niño occurrence is a vastly discussed topic on the markets now. This keeps the prices high to some extent and frightens buyers. There is lack of humidity all over the Northern hemisphere and let’s not forget it is only the beginning of April. What could happen? If humidity is too low over the season, the initial estimates on 2017 – 2018 wheat yield of 735 mln tons will be reduced by, let’s say, 20 mln tons more down to 715 mln tons, which is very, very little. The same goes for corn – a drop below the 1-billion mark for the new yield will have an extremely positive effect on the market and prices. Wheat and corn stocks may be high now, but they can quickly sharp below the current consumption level. We are waiting!

Corn price – Corn futures in Chicago remained steady yesterday. USDA increased corn production in Brazil by +2 mln tons and by +1 mln tons in Argentina. Corn stocks worldwide have grown by +2.3 mln tons to 222.98 mln tons. Taiwan needs to purchase 65,000 tons of corn from Argentina, Brazil, South Africa and the USA to be delivered in June and July.

Soybean price – Soybean futures in Chicago went down moderately yesterday. The main news yesterday was the large soybean stocks growth worldwide at the end of the current season by +4.6 mln tons. Brazil will achieve a 3 mln tons bigger soybean yields up to 111 mln tons. There has been some increase in Paraguay, Uruguay and Argentina. Conab increased its forecast on soybean yield in Brazil, too, from 107.6 mln tons to 110.162 mln tons. The Ministry of Agriculture of China has increased its forecast on soybean import in the country over the season by 1.24 mln tons to 86.55 mln tons.

Wheat price – Wheat price in Chicago went up yesterday despite the growth of the world wheat stocks. USDA increased wheat stocks by 2.32 mln tons to 252.3 mln tons. Japan needs to buy 126,405 tons of wheat from the USA, Australia and Canada. In the new season, wheat areas in Australia will be 33.11 mln hectares, which is a 1% decline on the old season.