EUR / USD index fell to 1.1264. WTI crude oil dropped to 45.94 USD / barrel.

Oil falls cheaper on Wednesday after markets remain oversupplied, although tensions in the Middle East and declining US stocks have shown some price support. "Disappointed that the oil cartel and Russia have not presented a brighter plan to reduce the global surplus, market players sell off," said Fawad Razacazda, an analyst at  Forex investment company . The US Energy Information Administration said on Tuesday that global fuel production and consumption are broadly balanced at 98 million barrels per day, though stocks remain high. According to Greg McKenna, a strategist at AxiTrader, oil prices will be determined by the stocks.OPEC's efforts to curb production can be compromised by the US mining. It could reach a record-high of 10 million barrels a day next year, compared to 9.3 million barrels today. Tensions in the Middle East, which began with the decision of several countries led by Saudi Arabia to disrupt their relations with Qatar  on the one hand, threatened the OPEC deal and this lowers prices. On the other hand however, trade, including oil, is hampered and this puts pressure on prices in a positive direction.On Tuesday evening the US Petroleum Institute announced that stocks in the US fell by 8.7 million barrels in the week to May 26. The official data of the Energy Information Administration will be published later today.

Yesterday corn futures in Chicago rose after the fears that problems in the northern part of the United States are shifting to southern regions. Rainfall is expected in the southern parts of Canada, and in North Dakota and Minnesota. In fact, the weather is variable and it does not reach extremes so far, but it is not the most favorable. In the following days temperatures in Iowa will exceed 35 degrees for more than three days, with no rainfall in the past two weeks.

In the past week, ethanol production in the US was 999,000 barrels a day, down by 21,000 barrels a day compared to the previous week. For the first time since the beginning of the year production fell below the level of the previous year.

Now corn  breaks the price levels and that has been expented for long. This happens on the backdrop of  weather problems and a very large net short position in corn futures.Now it is expected that farmers will hold the corn on the market, and they are not that little. So the upward movement will not be without problems.

The dry weather and the rise in corn prices helped yesterday to the wheat to go up. On Tuesday spring wheat was the catalyst for price growth. In the US they do not need many wheat problems in order to have tight balance of it in the new season. Any problem in excess will also create a shortage of wheat for export. In areas with spring wheat in South Dakota, temperatures above +37 degrees are now expected. In fact, several days of high temperatures are not a problem, but if the period continues dry and hot, then things are changing.

Some analysts say a drop in average wheat yields in the US to 40 bushels / acre would provide a 21.8% stock, which is the lowest level since 2007-2008 until now, when this ratio was 12.4%.
The question now is how far can US grain prices rise? The continuing problems with the weather and very large net short positions are a condition for a price explosion.

However, the market is cautious given that key crop data are expected. Conab today will publish data on Brazilian crops and on Friday the USDA will release its June report. These data are expected to remind for the sufficient stocks of all crops, even if stocks of high-quality wheat in the world drastically decrease. It will be used weaker wheat and the flour will be mixed with additives - a well-known solution.So far, short market rallies are expected - until some short positions are closed. Sustained price rises will be due to prolonged drought in many grain-rich regions of the world by the end of July. "However, there is a risk of rapid rainfall that wipes out all the profits so far. Let's not forget that drought is for weeks and months, and rainfall falls for hours. So the topic of drought can disappear for one day from the comments and we can not see it anymore.

So far, crop yields in the world seem to be good, not top, but good, and that's what they're trying to do - how long they will be sufficient for a healthy grain balance in the new season. A problem for EU exporters will be the strong rate of the euro.

According to Oil World, in May 2017 South American soybean exports are up 2% from the previous year and reach 13.71 million tonnes. From Brazil, a record 11 million tonnes of soybeans (9.92) have been exported, with the most being shipped to China. From Paraguay 0.75 million tonnes (0.61), Argentina 1.55 million tonnes (2.19), Uruguay 0.45 million tonnes (0.76). During the period January - May 2017 from these countries 42.39 million tonnes of soybeans were exported (38.79), From Brazil 34.79 million tonnes (30.81), Argentina 2.58 million tonnes (2.95) and from Paraguay 3.92 million tonnes (3.83).

The volumes are particularly high and what does China do with so much soybeans?

Wheat prices - yesterday wheat futures in Chicago rose by 7 - 9 cents / bushel. Export sales of US corn for the past week are expected at 0 - 300,000 tonnes of old crop and 350,000 - 550,000 tonnes of new crop. In the USDA June report, the wheat production in the US is expected to be reduced to 49.37 million tonnes. Taiwan is looking to buy 92,400 tonnes of wheat from the United States.

Soybeans prices - yesterday soybeans futures in Chicago rose by 2 - 7.25 cents / bushel. Export sales of US soybean will be in the range of 300 000 - 500 000 tonnes + 50 000 - 250 000 tonnes, soybean meal 50 000 - 200 000 tonnes,  and soybean oil 8 000 - 37 000 tonnes. The USDA is expected to update the soybean crop in Brazil to 112.3 million tonnes and Conab to 113.3 million tonnes. The USDA is expected to announce the soybean crop in Argentina at 57.1 million tonnes (57).

Corn prices - yesterday corn futures in Chicago rose significantly. In the past week, ethanol production in the US dropped by 21,000 barrels per day to 999,000 barrels per day. Stocks declined by 781,000 barrels to 21,982 million barrels. Export sales of corn are expected to be between 500 000 and 700 000 tonnes for the old crop and 100 000 to 250 000 tonnes for the new crop. USDA is expected to announce 96.6 million tonnes of corn crop in Brazil (96). Grain analysts estimate the corn crop in Brazil at 100.7 million tonnes and Conab at 98.3 million tonnes. Probably USDA will report Argentina's corn crop at 40.29 million tonnes (40).

Bad weather - YES, but these stocks, these new crops in South America - are ruining our story even at its beginning ......