To your attention a brief report on the situation in the grain and oilseeds markets as of June 21, 2019. The report is presented by the analytical department of the Commodity Exchange KME:
Main events in the corn market
Last week, the corn market was in the red zone, because traders were nervous because of expectations of good news from the fields regarding the course of the harvest campaign in the United States and recorded their profits before the release of statistical reports. Last week on Friday and this week, on Monday, quotes were traded at a psychological level of 180 USD/t and never beat it. On Tuesday and Wednesday, the market was in correction and dropped to 173.61 USD/t. The volume of contracts has fallen to averages – about 500 thousand contracts per day. On Thursday, the market played a decline on Tuesday and Wednesday and closed at 177.16 USD/t. On Friday, the market was moving in the lateral trend, and the volume of contracts remained average. European markets last week followed the dynamics of bidding in Chicago. By mid-week, prices fell to 177.25 EUR/t, and on Thursday and Friday, they added 25 cents each day. The market after a sharp increase in trading in the lateral trend. Predatory mood loses strength, and bearish vice versa are gaining momentum. The market expects that the corn deficit will not become as critical as it was previously estimated.
KME analysts expect the continue of quotation increase to 175-180 USD/t for the next week, but the market will continue to test the support level of 170 USD/t.
Major events on the wheat market
Wheat was traded under the influence of corn last week. The dynamics of the trades repeated the trend in the corn market on the Chicago Stock Exchange. Until Wednesday, the market has lost more than 6 USD/t, on auctions in Chicago and 2.75 EUR/t in Paris. By the end of the week, the market had almost played Tuesday’s position and ended the week at the level of 180.75 EUR/t in Paris and 193.27 USD/t in the United States.
KME analysts explain such dynamics of trading by the correction of the market, which always goes after a sharp change of trend. The technical parameters of the bidding dynamics suggest that there is a high open interest in the market and a continuation of the bullish trend at least until the end of next week. The level of resistance is estimated at 200-205 USD/bushel, and therefore the growth potential is 15-20 USD/t before the start of the marketing season.
The main events on the market for soybeans
Last week, the soybean market is on the side of the trend without serious fundamental factors of influence. On Monday, the market has plunged to 335.38 USD/t, and on Wednesday prices fell to 331.89 USD/t. After the correction on Tuesday and Wednesday, traders played a position to 336.39 USD/t on Thursday. On Friday the market has continued correction, and trades closed at 331.7 USD/t. The market closely monitors the pace of the sowing campaign in the United States.
On the contrary, the soybean oil market showed opposite dynamics – quotes rose on Thursday and reached 630.3 USD/t, were corrected to 627 USD/t on Friday. Trading volumes are average, about 130 thousand contracts per day. Such trade indicators indicate an overwhelming demand for soybean oil than for raw materials – beans.
Main events on the rapeseed market
The European rapeseed market was under the pressure last week by fundamental news of the growth in processing volumes in EU countries, an increase in forecasts by US Mineshine experts by the 2 million tons increase in production worldwide. USDA expects rapeseed production growth in Australia, China and Ukraine. Canada, which is ranked first in terms of canola production, has to grow and harvest pre-projected oil production, while India, the European Union and the US will reduce volumes. Increase in production forecast has pressed prices. For a week, the price of rapeseed on the French stock exchange EuroNext (Paris) has gradually lost 4.5 EUR/t – from 372.25 to 368.75 EUR/t.
KME analysts predict a further decrease in quotations in the oil market, as fundamental factors will put pressure on the market.