EUR / USD index rose to 1.1246. WTI crude oil dropped to 44.74 USD / barrel.

Oil demand will overtake supply in the second half of this year, but surplus stocks will continue to exist in 2018 affecting the global oil producers who are cutting their output in order to deal with the excessive stocks. According to the forecast of the International Energy Agency (IEA) about higher-than-expected demand growth next year, even stronger production will be met by the US and other countries outside the Organization of Petroleum Exporting Countries (OPEC).In its monthly market report which includes forecasts for the next year, the based in  Paris agency says: "The prospects for 2018 should be sobering for those producers who want to limit the supply." The IEA expects global demand to increase by 1.4 million barrels per day next year compared to an increase of 1.3 million barrels per day in 2017 as China and India will increase their consumption to a record high of 99.3 million barrels per day. However the growth of production of non-OPEC countries in 2018 led by the US, will outpace demand growth. The forecast indicates that it will increase by 1.5 million barrels a day, and this is more than twice as fast as this year.Shale production in the US is the most serious reason for this. The forecast is that it will expand by 780,000 barrels next year after a 430,000 barrel growth in 2017. The forecast contradicts the expectations for a deficit on the oil market in the second half of this year when demand is, in general strong.

The Federal Reserve raised the US interest rate by 0.25% against the backdrop of declining domestic inflation and a slowdown in economic growth since the beginning of the year. With this decision, the interest rate in the country is already in the range between 1 and 1.25 points. This is the second interest rate hike this year, and according to analysts with this action,  Fed shows its confidence in the US economy. Reason for the increse the institution saw in the growth of job positions in the country.

At the increase of  the price of spring wheat in the US, the market faced big sales. Precipitations fallen late last week in the northern US will stop the negative impact of drought for a certain time. For a full recovery however we can't talk. Precipitation will certainly benefit the crops, but they will not end the drought. In the coming days rainfall is not expected. Some analysts expect the average yield of spring wheat in the United States to come closer to 40 bushels / acre, averaging over the last three years of 47 bushels / acre. This will be the lowest yield for the past 20 years, and high-protein wheat will be a deficit on the market.

Wheat crops in Canada are expected to be in good condition despite the drought in the southern parts of the country.
Now the price of spring wheat in the US is the highest for the period since 2014 until now.

Durim red winter wheat which is now harvested has good yields at a lower protein level. Now the protein is about 10% at a minimum of at least 10.5% in order to be sold for sale in Kansas. The millers mingle durum red wheat with protein 11.5% and durum red wheat spring with 14% protein to produce bread flour. This year however, both wheat will be  deficit on the market.

Given the prospect of higher prices for high quality wheat in the US, export prices of lower-quality wheat are now high. At the last Egyptian auction there was no supply of American wheat at all. The United States exit the most competitive market, but is it for long? Certainly the wheat crop in the country will be lower. Hence, higher prices and less export. Less export, but when. Still, domestic stocks are high and now there is potential for exports. Consequently the US will still have to make a small export, which can only be done at lower prices. Sales may be appropriate at the beginning of the season - without long retention in warehouses.

The last two wheat purchase auctions from Egypt are very unusual for this time of year. Usually, the country does not buy wheat during its campaigns. This year we get another confirmation that their wheat crop is weak and they are in the market at that time.
We have to mention that in Iowa there is  drought that reduces the potential for yielding corn and soybeans. If it does not rain, this state will be the center of corn news in the coming weeks.

Precipitation in the eastern parts of Australia is a reason to raise the minimum forecast for wheat hcrop  in the country during the season, but it remains to revolve around 24 million tonnes.
German Farmers Association DBV increased its forecast for wheat and rape crops in Germany as a result of the rainfall in the country. In the current season, the wheat crop will reach 25.2 million tonnes in the May forecast of 24.98 million tonnes, up by 3% from the previous year. The winter rapeseed crop will be 4.78 million tons (4.68 million tons and + 4.7%). Winter barley crop used mainly for feed will reach 8.74 million tonnes, which is 2.3% less than the previous year. The crop of spring barley will grow by 7.4% to 1.9 million tonnes. Corn crop will decrease by 5.7% to 3.78 million tonnes in areas of 392,000 hectares (+ 5.7%).

The authorities in China have authorized the import of 16 GM varieties of different crops - five soybeans, three rapeseed varieties, three cotton varieties, one sugar beet variety, and four varieties of corn. The country prepares for normal trade relations in the coming years, ie. without major restrictions on the import of production.

Oil - it is increasingly apparent that commodity prices can not rise significantly. Price from even $ 60 / barrel crude oil will be high. High enough to cause a serious increase in production around the world - not just shale manufacturers in the United States. We can not rely on the price of oil to pull the oil and grain market around the world.

Wheat Prices -yesterday in Chicago  wheat prices dropped to a minimum. Weekly export sales of wheat from the US will be at the level of 350,000 - 550,000 tonnes - all from the new crop. Analysts believe that in the new season wheat imports into Egypt will be about 6 million tonnes or an increase compared to the old season by + 11.11%. Now the FOB price of Russian wheat is below that of the American in the Gulf of Mexico.

Soybean prices- yesterday soybeans prices in Chicago dropped to a minimum. Export sales of US soybeans are expected to reach 250,000 - 500,000 tons of old crop+ 100,000 - 300,000 tonnes of new crop. Sales of soybean meal will be 50,000 - 250,000 tonnes and soybean oil will be 5,000 - 35,000 tonnes. In May 3.89 - 3.92 million tonnes of soybeans were processed in the US.

Corn prices- yesterday the price of corn in Chicago fell by 2 - 4 cents / bushel. For the week ended on June 9, 2017 ethanol production in the US was 1.002 million barrels a day, up by 3,000 barrels a day from the previous week. 2.67 million tonnes of corn were used in the ethanol production this week. US ethanol stocks increased by 560,000 barrels to 22,542 million barrels. Export sales of US corn old crop will be 500,000 - 700,000 tonnes and from the new crop 100,000 - 300,000 tonnes. Authorities in China have sold 22.8 million tonnes of corn from the state reserve, with only about 3.5 million tonnes this week.