The currency pair EUR/USD rose to 1.1932. The price of US WTI crude oil rose to 73.30 USD/barrel.

The price of oil continues to rise due to shrinking stocks in the United States and China.

Yesterday, CBOT September wheat futures prices fell by 11 3/4 cents to close at $6.52 a bushel. The drought in the northern states continues. Wheat crops in Kansas look good and so do yields. The harvesting campaign of wheat in the southern parts of the Black Sea region is starting and the yields are looking very good. In the week ended June 17, 2021, the export sales of wheat from the United States were 374,147 tons (287,137 tons a week earlier and 448,677 tons a year earlier). Export commitments reached 6.17 million tons (6.78 million tons a year earlier). SovEcon has raised its forecast for the wheat production in Russia in 2021 by 2.2 million tons to 84.6 million tons. The wheat production estimate for Ukraine has also been raised by 0.3 million tons to 29.2 million tons. Argentina's wheat production is expected to reach a record 20.7 million tons (+17.2% compared to 2020).

Yesterday, Chicago December corn futures prices increased by 1/4 cent to close at $5.36 a bushel. A supporting factor for prices are rumors that China will buy corn from the old crop and private analysts are lowering their forecasts for the corn areas in the United States in 2021. Forecasts for new rainfall in the US Corn Belt were a factor holding back growth. The forecasts indicate precipitation of 100 - 150 l/sqm, which is above what is needed at the moment. In many places in the US Corn Belt, crops are drowned, but rainfall could lead to a potential boost in yields. The drought remains dominant over the western and northern regions and in Canada. Weekly export sales of corn from the United States were 216,284 tons (17,994 and 461,650). Export commitments reached 69.53 million tons (41.95). Sales of corn from the new crop reached 310,809 tons (76,899) and export commitments for the new corn crop add up to 15.68 million tons (3.63), which is a record level for this time of year. SovEcon has raised its forecast for corn production in Ukraine in 2021/22 by 1.5 million tons to 38.3 million tons. Given the current market situation, it is very likely that we will see corn prices of 4.5 USD/bushel.

Yesterday, CBOT November soybean futures prices fell by 8 1/2 cents to close at $12.91 3/4 a bushel. Favorable conditions for crop development lowered prices yesterday. The IGC's forecast for a good soybean production and growing stocks also depressed the market. Weekly US soybean export sales were 141,669 tons (65,282 and 601,857). Export commitments reached 61.76 million tons (44.58). Sales of soybeans from the new crop were 47,247 tons (560,745) and export commitments for the new soybean crop totaled 7.61 million tons (6.1). Weekly sales of soymeal were 287,612 tons and weekly soyoil sales reached 2,374 tons. The USDA reported new export sales of 132,000 tons of soybeans from the new crop to China and 260,000 tons to an unknown destination. Palm oil prices are expected to decline by the end of the year, given growing production and consumption restrictions on biofuel production in the EU.

In general, export sales are weak. Buyers are currently monitoring the situation around the weather forecasts in the United States, the abundant new wheat crop in the Northern Hemisphere and the good condition of wheat crops in Australia. China continues to buy large quantities of US soybeans from the new crop.

Analysts expect the corn areas in the United States to reach only 92.9 million acres and the soybean areas - 86.5 million acres, which is extremely insufficient to maintain stable grain balances given production problems.

Yesterday, the IGC published its June report on the state of the world's grain balance in 2021/22. Key takeaways:

Grain - The world's total grain production will be 2.301 million tons (2.292 and 2.216). World's total grain consumption is estimated at 2.299 million tons (2.297 and 2.237) and total ending stocks of grain are projected at 597 million tons (595 and 595), including 134 million tons held by the eight largest exporters (137 and 132).

Wheat - The world's wheat production is projected at 789 million tons (790 million tons in the May report and 773 million tons in 2020/21). World's wheat consumption is expected to reach 787 million tons (787 and 769) and ending stocks of wheat are estimated at 283 million tons (288 and 281), including 60 million tons held by the eight largest exporters (59 and 62).

Corn - The world corn harvest will be 1,201 million tons (1,192 and 1,131), consumption 1,201 million tons (1,199 and 1,162), final stocks 267 million tons (264 and 267), incl. in the four largest exporters 43 million tons (50 and 37).

Soybeans - The world's total soybean production will be 383 million tons (383 and 363), world's soybean consumption is projected at 378 million tons (378 and 366) and ending soybean stocks are expected at 53 million tons (51 and 47), including 12 million tons held by the three largest exporters (10 and 10).