The apparent issues regarding raw material and processing specifications are bullish factors. The tender remains stable, the soy continues to rise
Soft wheat, stable prices until the end of the harvest
Italy
The response of the fields remains heterogeneous with discrete variability between the different production areas of the North, both in product characteristics (where the beetle returns) and in rheology, with variability in values such as: W, P/l and stability. Quotations that remain at the level of the last week I’m waiting for the collection to be completed. Users pushing in light of low stocks at the end of the year. The “Bologna 14 protein grade” is worth €285/t starting with the “Specials” (item 2) with a discount of €35/t and the mixed products delivered at €245/t; Community bread baking slightly declining with strong grains and foreign “spring”, always well preserved and relaxing.
Europe
In the squares There is uncertainty I am waiting to understand the development of crops in several areas, hampered by an unfavorable climate (with damage to crops?) and the confirmation or rejection of the Black Sea humanitarian corridor, which without renewal will cross many countries south of the Sahara would lead North Africa should also steer demand to Europe. Currently, exports recorded in recent weeks are lower than in the same period last year. This reduces the price increase caused by the global context. The purchase of mills should be treated with caution due to the qualitative heterogeneity of the offer. For Paris, September forward prices remain at €230/t (-5 €/t); the Rouen commercial of ‘making bread’ at €227/t.
World
The operators are looking at the “corridor” decision and, above all, at the climatic development and the reactions of the harvest in the northern hemisphere, which would lead to a reduction in the protein content of power grain. The situation in bread baking is much more relaxed with the Russian offer to calm the markets. Of concern is the gradual decline in the vegetative state of North American “spring grains” and the slowdown in European supply (due to quality issues), which historically depressed price over the period. On the Russian side, a production of 85 million/t with a lower protein content than in 2022 is agreed. For Ukraine, exports in 2022/23 amounted to 17 million/t (minus 10% compared to the previous year). In the short term, geopolitics and the “weather market” will have the decisive influence on prices, e.g The markets are currently waiting, albeit on an uptrend. Argentine at $337/t, Australian Soft White at $288/t, Dns at $345/t, Russian milling at $235/t.
Durum wheat, quality problems raise prices
Italy
There The production volume in 2023 is slightly higher than in 2022, but with obvious problems in terms of product and milling specifications of the grain (gluten quality causes bed bugs), with some batches showing toxin levels close to the European limit. The markets are reacting particularly strongly to the “Fino type”, which cannot find any viable alternatives in Europe and North America in the short term. Due to the foxing, a strict (optical) selection is forced before grinding, which is reflected in the prices (large margins) of merchant ships and in the inevitable increase in the campaign deficit. Southern stock exchanges are repositioning the “Fino” with increases of up to 50 €/t. Markets in the North are aligned in terms of ‘give back’ prices to values ranging from 385-390€/t for Fino with discounts of 25-30€/t applicable to Class 2 and 35-60€/t t reach 3, plus a fourth entry on Ager Bologna to identify the proportion of the 2023 crop that is close to zootechnical consumption.
Europe
The scenario gradually changed over the weeks and Threshing confirms declines in both yields per hectare and quality. especially in two suitable areas such as Italy and Greece, which together represent 70% of European production. The latest forecasts speak of a harvest of 7.2 million/t (in 2022 it was 7.1 million/t), with sufficient local availability in France and Greece, while the rest of the community imports more from abroad production and exports are at historic levels. With the quality of the “average vintage” still uncertain, prices are consolidating upwards, with values reported from France of €365/t for durum wheat returned fob Mediterranean.
World
The drivers for the coming weeks remain the climatic development in the prairies of North America and the development of demand, where, given very low stocks, a decrease in consumption is expected (proportional to the decrease in production estimates), especially in the food sector (in favor of a greater use of glassy soft wheat) , with The feed sector has to absorb the worst quality wheat supplies. Prices are also recovering due to the currency effect (strength of the euro against the dollar) as Canadian holders are unwilling to sell the remaining volume for 2022 if not at a premium. Fob prices are recovering for cif values in the Mediterranean, ranging from US$390/tonne for Mexico to US$420/tonne for Canada.
When it comes to corn, supply outweighs demand
Italy
THE Harvest progress is excellent thanks to the periodicity of rainfall and (currently) a low pressure from fungal diseases and parasitic infestations, thanks to the possibility of carrying out treatments in good time. There is little of the old crop left for sale, but demand is mainly directed at ports and warehouses of ‘all origins’. The offer always takes precedence over the requests. In price competition, even with straw grain, corn fetches another €3/t in Bologna and another €5/t in Milan, which is a perfect match where corn “with properties” is quoted at €252/t, while the generic yield is about 247 €/t; Declining EU and foreign countries determine the general trend.
Europe
We continue to see the USDA report deliberations and Black Sea “corridor” negotiations. The 2023 harvest trend indicates a good harvest to 61 mn/t, which together with imports of 22 mn/t will ensure sufficient coverage of uses and, if exports remain at 2022 levels, a slight decrease in stocks in June 2024. Prices of uncertain evolution: more held in France and weaker in Eastern Europe where arrivals from Ukraine are pushing. On Euronext Paris, the August position (old crop) consolidates at 230 €/t, while November is at 225 €/t (down 10 €/t), with the “spot” French port of Bordeaux at 252 €/t tt (plus 2).
World
Rainfall and confirmation of larger acreage in the US partially offset speculation on the Cbot (positioning expires in July) and estimates of increased bioenergy use. The condition of the crop in America is excellent 50% of the time, e.g the influence of the extraordinary second harvest in Brazil seem to limit the positive impact of a negative year in Argentina and also in Ukraine (down 11% compared to 2022/23). This week, Cbot rallied 3% while FOB Ukraine price fell as the risk of the “corridor” not renewing increased. FOB prices: USA at $247/t, Ukraine at $197/t, Argentina at $223/t, Brazil at $218/t.
Slight increase in barley, soy rises again
Italy
feed grain: The commercial scenario for barley is emerging and sees a slight increase in the price of “heavy” barley, which is now around €200/t. soft, except for 205-220 €/t sorghum is still not listed (but the crop is growing well in the field). oilseeds: Soya continues to rise in line with recent developments in world market prices, although the new crop (Italy) went without any particular problems. The quotations assume that domestic soybeans are at €490/t and foreign soybeans are already at €500/t, with the €/$ exchange rate of 1.12 having a calming effect.
Europe
grain foraggeri: Local physical exchanges saw soft wheat fall while barley was stable. Demand remains hesitant, even if current price levels encourage converters to start developing rural areas, also to compensate for any non-renewal of the “corridor”. oilseeds: The increase in soybean prices and the climatic situation in Canada are driving up the community canola, which is also indirectly supported by the “palm”. Normal trade and technical coverage of the transformers bring the rapeseed price on the Euronext in August to €470/t (plus €25/t), Fob Rouen to €469/t; The ‘Oleic acid’ sunflower returned unchanged to S. Nazaire at €450/t.
World
feed grains: Market stability and barley prices are supported by Chinese demand in Europe and dry weather in Canada. The trade dispute between China and Australia remains open and this leads to likely instability in the markets at the “optional country of origin” level. As for feed grain, the supply is high and the downward pressure on prices from the Black Sea remains evident. Black Sea fob barley at $174/t, Australian at $231/t; SRW fob Gulf wheat at $255/t, Ukrainian wheat at $209/t. oilseeds: Low inventories, investors’ willingness to “marginalize” and a non-spike demand leads soybeans to rise, waiting to understand the real improvement in the US crop condition and the relevance of Brazilian supply. Canola gains value due to ongoing drought in Canada. FOB prices: US soybeans at $583/t, Brazilian at $520/t and Argentina at $548; Canadian fob canola at $629/t.