Grains prices in Chicago went down on Thursday with wheat being the top mover. Grains prices in Paris changed differently – rapeseed went up, but wheat decreased.

The EUR/USD index went up to 1.0721. Crude oil went down to 50.29 USD/barrel.

The leading Persian Gulf petroleum producers – Saudi Arabia and Kuwait – gave the clearest signal so far that OPEC is planning an extension of the production reduction agreement. Russia, which is not an OPEC member, is yet to declare its position.

All grains prices in Chicago went down yesterday as wheat had the biggest decline. The meteorological situation in the world remains unchanged. The conditions in South America are good, there has been more rain in the USA, it is dry in Western Europe and cold in the Black Sea region.

Will the cold wave in the Black Sea region affect the growth of the winter and spring grains? There has been no answer to this question so far, but damage to the future production is estimated. Overall, unfavorable crop conditions have appeared this year (the winter crops at the moment), which will certainly affect the production level.

With normal weather conditions, the grain yield in Russia will be 110 mln tons, which will be 7% less than the previous year, but over the average 5-year level – 98 mln tons, according to the latest FAS USDA forecast. Wheat yield will be 66 mln tons (-6.5 mln tons versus 2016 – 2017), barley yield will be 16 mln tons (-1.5), corn yield will be 15.3 mln tons (0), rye yield will be 2.6 mln tons, oats yield will be 4.5 mln tons, rice yield will be 715,000 tons and millet yield will be 550,000 tons. Over the season, grains export will be 37.7 mln tons (+2.0) including 28 mln tons (+1.5) of wheat, 3.3 mln tons (+0.3) of barley and 5.4 mln tons (+0.3) of corn.

Over the new season, wheat yield in Ukraine will be 23.9 mln tons, which will be 11% less than the current season. Winter wheat areas are smaller, but spring wheat areas will not compensate. Wheat export will be 12.9 mln tons (-19%). Barley production will be 8.7 mln tons (-12.5%) – decline as a result of smaller areas. Barley export will be 3.7 mln tons (-27.5%). Corn yield will be 28.7 mln tons (+2%) – as a result of the larger areas. Corn export will be 21.5 mln tons (+7%).

The decline has been immense, but this is the way to achieve normal levels, unlike 2016 with all its records. We can expect even further yield decline if rainfall volume drops in the next few months. Another wheat yield decline is quite likely of about 2 or 3 mln tons in Russia and 1 mln tons in Ukraine. Farmers have definitely decided to reduce barley areas as a result of its low price and reduced demand in the current season. Corn yield growth in Ukraine is not worrying, because corn yield in the USA will be lower and demand will be divided between South America and the Black Sea region.

The weekly sales of 2016 American wheat did not live up to the analysts’ expectations and were close to the lower margin – 350,000 – 750,000 tons. Since the start of the season, export wheat sales from the country have been ahead of last year’s results by 40.7% (41%). For USDA’s annual forecast to be achieved there is less than 1%. The planned wheat export of 27.9 mln tons will definitely be achieved in the next couple of weeks. The forward sales of 2017 wheat yield drag further behind the previous season and are now at 1.576 mln tons (1.948).

According to a survey carried out by Reuters, rapeseed areas in Canada will reach 8.62 mln hectares in 2017. This growth will be the result of wheat areas declining by 3.5% to 9.065 mln hectares and will reach bottom level for the past five years. Rapeseed areas will be the largest since 2012. This season’s rapeseed ending stocks in Canada will be 1.1 mln tons, which will be the lowest level for the past four years. Official statement by Canada’s Bureau of Statistics is expected today and this may boost the market. Wheat production in Canada will definitely fall in 2017.

Corn price – Corn futures in Chicago went down by 4 cents/bushel yesterday. American corn export sales between April 7 and April 13 were 756,352 tons from the old yield (+2.49% versus last week and -37.11% versus last year) and 91,820 tons from the new yield. The weekly export measured 1,408,302 tons. Japan and South Korea were the biggest buyers. Analysts have increased their forecast on corn yield in Brazil to 93.2 mln tons versus 89.6 mln tons in the previous forecast. Conab is planning to buy 1 mln tons of corn off farmers in Brazilian state of Mato Grosso with a view to ease realisation. It is expected that large safrinha volumes will remain in outdoor storage areas. 4.4% of corn areas in Argentina were harvested in the past week with 22.6% harvested since the start of the campaign.

Soybean price – Soybean futures in Chicago went down by 3.5 – 5 cents/bushel yesterday. American soybean export sales were 211,004 tons old yield (-47.5% and -48.3%) + 14,000 tons new yield. Export has reached 430,973 tons. Soybean meal sales were 135,016 tons (-14.9% and +2.6%) while soybean oil sales reached 33,172 tons, which was 77.9% more than last week versus only 2,085 tons last year. Abiove has increased its forecast on soybean yield in Brazil to 110.7 mln tons versus 107.3 mln tons in the previous forecast. Soybean export from the country has grown by 0.5 mln tons to 60.3 mln tons.

Wheat price – Wheat futures in Chicago plummeted by 7.75 – 12.75 cents/bushel yesterday. Wheat export sales were 413,964 tons (+0.8% and -11.2%) + 137,175 tons. Export was 740,762 tons. Indonesia, Japan, Mexico and South Korea were the biggest buyers. Since the start of the season, wheat purchase futures have reached 27.65 mln tons or +41% more than last year.

All American grains export sales have dropped and levels are not very attractive, especially for corn. The situation with wheat and soybeans is clear – the plan will be accomplished.