Yesterday the corn price in Chicago rose followed by wheat, and soybean prices dropped. In Paris the price of rapeseed remained stable and the wheat and corn prices remained stable.
EUR / USD indexdropped to 1.0857. WTI crude oil rose to 47.60 USD / barrel.

Oil prices rose yesterday partly due to estimates for decline of the oil stocks in the US, which alleviates the fears for over-supply of the market. Another reason for the rise in prices are some speculation that Saudi Arabia could reduce its supplies to the Asian region against the backdrop of the struggle of the Organization of Petroleum Exporting Countries (OPEC) to oppose to the higher US production. The US Oil Institute announced late on Wednesday that US crude oil stocks fell by 5.79 million barrels. Such a decline in stocks is generally perceived by investors as an indicator of increasing demand for oil by the world's largest economy.

Yesterday's top news was  related to the May USDA report. The predictions were interesting because there was a first forecast for the season 2017 - 2018:
1. Wheat - In 2017 - 2018 wheat crops in the world will be 737.826 million tonnes at 753.090 million tonnes in 2016-2017. Consumption of wheat in the world will drop to 734.89 million tonnes (740,159) and the ending stocks will reach 258,287 million tonnes (255,351). US wheat production will be 49.529 million tonnes (62,859), Australia 25 million tonnes (35), Canada 28.35 million tonnes (31.7), EU 151 million tonnes (145,471), Russia 67 million tonnes (72,529), in Ukraine 25 million tonnes (26.8). Still, world's wheat productionremains above the consumption, although a little.

As a whole the wheat balance remains free with no supply stress, part of the wheat feed consumption will be taken by the corn. The corn will take some of the barley's consumption.
2. Corn - In 2017 - 2018 corn crops in the world will be 1,033,664 million tonnes (1,065,114), consumption 1,062.299 million tonnes (1,053,585 million tonnes) and stocks 195.265 million tonnes (223.90). US corn production will reach 357.267 million tonnes (384,778), Brazil 95 million tonnes (96), Argentina 40 million tonnes (40), EU 63.5 million (60,771), Ukraine 28 million tonnes (28). For the first time for many years, corn crops in the world will be significantly  below consumption.

3. Soybean - In 2017 - 2018 the global soybean crops will be 344.676 million tonnes (348,038), and stocks 88,806 million tonnes (90,137). US soybean production will be 115.802 million tonnes (117,208), Brazil 107 million tonnes (111.6), Argentina 57 million tonnes (57). Soybean stocks in the world are growing despite the strong demand. China as the world's largest soybean importer will import 93 million tonnes in the new season (89).
The market expected a decline in the global corn stocks, but not so much. The wheat stocks were also expected to decline, but the USDA forecasts points growth. Global wheat stocks will be at a record high level.
Demand for soybean in the world is pretty good and is likely to remain so. However, crop areas in the US are on the rise and will need a significant reduction in the crop to feel a deficit - probably.
The average US corn yield is expected at 170.7 bushels / acre at 171.6 bushels / acre in 2016.

Overall the report seems neutral. Corn will probably have a price increase, but wheat will oppose that. In the Black Sea region the crops either remain at their old levels or fall slightly. Stocks of wheat and corn in the region are down. I do not see a force that can drastically change the wheat balance. It is tha one that creates surpluses and problems with the low prices.

According to Oil World's latest forecast, in the current season the soybean crop in Argentina will reach 54-55 million tonnes at 54.7 million tonnes in 2015-2016 and 60 million tonnes in 2014-2015. The big moisture in the soil delays the harvest. In the wettest regions there are also much lower yields from the previous year. Weather forecasts predict that rainfall will continue until 19.05.2017, which creates serious concerns about the quality of the new soybean crop. As a result, it is possible to reduce the crops estimate.So the USDA forecast looks quite optimistic.

French wheat exports will not decrease as dramatically as it was  expected in the previous months. According to FranceAgrimer's latest forecast in 2016 - 2017 wheat exports from France will be 11.08 million tonnes, which is 47% less than the previous season, but 230,000 tonnes more than the previous forecast. Exports to non-EU countries will grow by 200,000 tonnes to 5.2 million tonnes. In 2016 the wheat crop in France was not of high quality. Considering that the world also had a shortage of high quality wheat, the demand from France did not drop so steeply. The weak euro was also supported during most of the season. Exports to a traditional customer like Algeria dropped 59 % to 1.46 million tonnes. At the same time new buyers appeared - the US with 146,000 tonnes and Vietnam with 57,000 tonnes.

Wheat price – yesterday wheat futures in Chicago rose by 2 - 5 cents / bushel. Weekly export sales of US wheat are expected in the range 250,000 - 650,000 tonnes totally for old and new crops. In the first quarter of 2017 wheat exports from Russia were 6.147 million tonnes or 13.9% more than the previous year.

Soybean price – yesterday soybean futures in Chicago fell by 3.75 cents / bushel. Export sales of US soybeans are expected to be between 300 000 and 700 000 tonnes, soybean meal 40 000 - 215 000 tonnes and soybean oil 0 - 35 000 tonnes. China's Ministry of Agriculture predicts that soybean imports in the country in 2017 - 2018 will be 93.16 million tonnes, which is 4.15% more than 2016-2017.

Corn price – yesterday corn futures in Chicago rose by 4.75 - 7.25 cents / bushel. In the past week ethanol production in the US was 1.006 million barrels a day, which is 20,000 barrels a day more than the previous week. Ethanol stocks in the country fell by 158,000 barrels per week to 23,055 million barrels. Export sales of corn are expected to be between 750 000 and 1 150 000 tonnes.
For the new season I expect the trend of  growth of crops and stocks to continue, as well  the drop in prices to be interrupted. There is no way to expect a strong growth in crop prices having these stocks, but let's note that this will happen in the coming years.