Wheat and corn prices in Chicago remained almost unchanged on Wednesday, but soybeans soared. Prices in Paris went up with rapeseed being the top mover.

The EUR/USD index went down to 1.0598. Light oil went down to 53.11 USD/barrel.

According to The Wall Street Journal, Saudi Arabia – the actual OPEC leader – demanded with the rest of the producers that coordinated effort should be made to extend production reduction beyond June. On Tuesday evening, the American petroleum institute announced that resrves in the USA increased by 1.3 mln barrels last week, which surprised the analysts.

Yesterday, grains futures in Chicago were recovering from the bear position in USDA’s April report. Analysts confirmed again the excess in wheat, corn and soybean yields worldwide as well as the new record levels in South America. Everybody had been expecting new bear news, because the current ones have been long known and included in grains prices. However, markets remained steady based on concerns about crop development in the Northern hemisphere, excluding the USA. The dryness in vast regions of the Northern hemisphere is evident and it will decrease the high production potential in the next few weeks. There will be little rainfall in Germany in the next two weeks, but the situation in France will remain unchanged.

There are concerns about the rainfall in Argentina. It has been raining for the third week in a row; the rain has been abundant which has led to partial flooding. Meanwhile, harvesting has been put on hold and grain quality has been deteriorating, especially with soybeans. Forecasts predict an end to the rain next week, but the possibility it will be back before the end of the campaign is big.

Farmers in the USA and South America are not selling their soybeans at the current low prices. The stocks are big, but supply is not high at all. Brazilian farmers have sold 45% of the estimated new yield with the average level of 60%.

High wheat demand in Europe is still on matched by the low supply following the weak 2016 yield. The ending stocks forecast in France has been reduced by 400,000 tons. Soft wheat export from the EU has been 18.8 mln tons since the start of the season versus 23 mln tons a year earlier.

Rain in the USA has delayed corn sowing campaign. There will be frequent rain in the country in the next 10 days, which will obstruct the quick sowing. The campaign has just started and we should keep in mind that the daily corn sowing potential of American farmers is 7 – 8% of the plans, only in good weather.

Preliminary reports show that wheat export from Russia has remained high in March – 2.8 mln tons, which is 170% more than March 2016 – 1.71 mln tons. The total monthly grain export from the country has been 3.7 mln tons (2.77) including 148,000 tons of barley (299,000) and 635,000 tons of corn (703,000). 3.07 mln tons of grains (2.28) will be exported from Russia in April including 2.5 mln tons of wheat (1.42), 100,000 tons of barley (207,000) and 450,000 tons of corn (616,000). As of 6.04.2017, 243,800 tons of grains have been exported from the country and 533,500 tons of grains more are currently being loaded.

So far, grain export from Russia has been running at the same pace as last season. March data and April forecast say that there will be a positive change. This coincides with the Russo-Turkish problems and despite the Russian wheat holding good prices at the moment.

It appears that stocks are very high worldwide. However, only some commodities are being sold. That is excluding China. Farmers in most parts of the world are currently holding sales in the hope of higher prices. Estimations for a very weak new wheat yield in the USA are still preventing prices from falling. The drought in Europe and Australia as well as the excessive rain in Argentina are another factor for market stability. There will be new development and it will have something to do with the drought in the Northern hemisphere.

Corn price – Corn futures in Chicago went up by 1.5 – 2.5 cents/bushel yesterday. American corn export sales are expected at 800,000 – 1,000,000 tons from the old yield + 100,000 – 300,000 tons from the new yield. Over the past week, ethanol production in the USA went down by 33,000 barrels daily versus the previous week to 986,000 barrels per day. Production has not been below 1 mln barrels daily for over 22 weeks now. Ethanol stocks in the USA dropped by 802,000 barrels in the week to 22.903 mln barrels. Taiwan purchased 65,000 tons of corn from the USA to be delivered in June or July.

Soybean price – Soybean futures in Chicago went up down 7 – 8.5 cents/bushel yesterday. American soybean export sales are expected at 400,000 – 600,000 tons + 150,000 – 350,000 tons, soybean meal sales are expected at 50,000 – 250,000 tons + 0 – 200,000 tons and soybean oil sales are estimated 8,000 – 20,000 tons + 0 – 15,000 tons. American soybean sales have remained very high for this time of the year.

Wheat price – Wheat futures in Chicago remained steady yesterday. American wheat export sales are expected at 250,000 – 450,000 tons + 50,000 – 250,000 tons. 2017 wheat yield in Germany will increase by 2.7% versus 2016 to 25.26 mln tons.