The US currently has the lowest wheat reserves in the last 4 years

Yesterday, despite the fact that Egypt bought 355 thousand tons of wheat and the USDA report – the market at Euronext held a quiet session.

Egypt has purchased:

  • 60 thousand tons of wheat from Ukraine at the price of $237.47/t CIF ($222.50/t FOB + $14.97/t freight)
  • 60 thousand tons of Romanian wheat at $238.25/t CIF ($224.70/t FOB + $13.55/t freight)
  • 55 thousand tons from Russia at the price of $238.35/t CIF ($223.00/t FOB plus $15.35/t freight)
  • 120 thousand tonnes of French wheat at $238.34/t CIF ($220.30/t FOB plus $ 18.04/t freight)
  • 60 thousand tons of Russian origin at a price of $238.40/t CIF ($223.91/t FOB plus $14.49/t freight)

The Ministry of Agriculture of France has published a forecast of acreage of winter crops:

  • soft wheat: 4.729 million hectares, or 4.8% less than last year and 5.6% below the 5-year average. Areas reduced by heavy rainfall this fall
  • durum wheat: 225 thousand hectares (7.5% less compared to last year and 31.7% below the 5 year average)
  • winter barley: 1.25 million hectares or 4.3% less than last year and 9.2% below the 5-year average
  • winter rapeseed: 1.049 million hectares, down 4.9% from last year and 26.8% below the 5 year average.

Prolonged rains since the beginning of the month, especially in coastal areas, exacerbate the problem.

Yesterday the prices of rapeseed fell slightly after the palm tree. Data on palm oil stocks were lower than traders expected. Crude oil prices plummeted due to rising US inventories.

The USDA said in its report yesterday that world maize stocks are estimated at 300.56 million tonnes, compared to 295.96 million tonnes in the November report. Wheat reserves in the US are estimated at 974 million bushels compared to 1 014 million bushels last month. This is the lowest estimate of stocks in the United States since 2015. Despite this, wheat from the US is still not competitive on the international arena compared to Argentine or Black Sea origin. At the global level, wheat stocks are expected to reach 289.5 million tonnes at the end of the season (traders’ forecasts amounted to 286.18 million tonnes).

Among the most notable elements of the report are the increase in corn production in China to 260.77 million tonnes, which is 6.77 million tonnes more than last month.

The funds yesterday were net purchasers of 3,500 lots of corn, 4,500 lots of soybeans and 3,000 lots of wheat.

Trade talks between the US and China are still in the spotlight, with a few days remaining to allow for new US customs duties on Chinese goods.

In the Black Sea region, rising prices for palm oil are the main driver of sunflower oil prices in Ukraine. Prices in Ukrainian ports have increased by 6% since the beginning of the month to the level of 740 $ / t FOB. According to local operators, the price of sunflower oil should continue to rise, despite the heavy pressure of heavy crops.

In this context, processors who replenish inventory for work in the next three to four months are significantly contributing to the upward trend in prices.

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