Bearish trend: Supply higher than demand. Black Sea cash market still rise but slower than in past weeks. The wheat market is sensitive to crop condition adjustments and production forecasts. Prices are slowing growth, seasonal decline is expected. Stock quotes dropped to the lowest levels in recent weeks.

CORN Crops in the Northern Hemisphere are in excellent condition, and demand from the ethanol complex is not growing. China continues to buy from the US for a new crop, but there is no other demand. According to ANEC data, shipments of corn from Brazil do not exceed last year's rates (July - expectations, the last line - the result of the year).

Despite the upward trend, corn exports are proceeding at a slow pace due to weak demand. Ukrainian exports in July also lag significantly behind last year. The state of crops in the United States exceeds the estimate of previous years, and the types of yield are growing. Production may adjust upward again despite the downward revaluation of space in the previous quarterly report.

The price of sorghum in the US is highly dependent on exports compared to other grains, and China has been the most important buyer in recent years. The standard dependence of the price on corn remained. With the return of China to the market, sorghum prices rose to $ 229. US ethanol margin surged on lower corn quotes.

WHEAT The market is sensitive to crop condition adjustments and production forecasts. Prices are slowing growth, seasonal decline is expected. Stock quotes dropped to the lowest levels in recent weeks.

In Russia, the area under wheat has been officially increased. SovEkon, which included this in the production estimate, left the last forecast at 79.7MMT so far. IKAR raised expectations by 1.5MMT. Rusagrotrans reduced wheat production to 77.5MMT despite record acreage since 1982. The wheat harvest in the Center will be a record, the Volga - almost a record, but in the Urals and Siberia - the lowest since 2012, and in the south - since 2014.

There was no revaluation of production in Ukraine. Exports, including lineups, at the beginning of the week were: Russia - 2,416MMT against 3,217MMT last year, Ukraine - 831.6KMT against 1,118MMT a year earlier. The pace of exports to the EU also lags behind last year. On the photo - Ukrainian wheat, Central Ukraine, the yield of the surveyed field is 6.6-6.8 MT / ha at a moisture content of 12.3%, protein is 11.5%.

The Ministry of Agriculture of Kazakhstan expects the gross harvest of grain and legumes in 2020 at the level of 20.5 million tons, which is 10.8% more compared to the previous forecast and 17.8% more than last year. Previous expectations were 18.5 million.

IGC renew estimation of world wheat production. Their forecast does not correspond to the expectations of market players and the reports of local analysts. In particular, Argentine experts see the potential for the harvest at 18.19MMT. In addition, the forecast does not include changes in the state of crops in a number of other countries - Kazakhstan, Turkey, North African countries remained unchanged. It is possible that the next revaluation will change the expectations of world production.

In turn, MARS raised its expectations for average yields in almost all EU countries. The numbers for Romania and Bulgaria are questionable, with local analysts reporting extremely low production.

GASC bought the largest lot of wheat since the beginning of 2018 for September 2020 with a payment delay of 180 days. Basically, grain of Russian origin was bought, the price is $ 1.6 higher than the previous tender for Russian grain. Ukraine has sold a boat of wheat to Mexico; the grain is being loaded in one of the Ukrainian ports. Last season, Mexico bought 280kMT of Ukrainian wheat.

Iraq expects to become self-sufficient in wheat, having removed more than 5 MMT in the current season (from August to August). The need for wheat is 4.5 MMT per year. Last year, the state bought 4.9MMT from manufacturers. Information on purchases of Black Sea wheat from Pakistan has not changed, the number of contracted boats (from 5 and more) is still not confirmed on the market, the average price of wheat is $ 235 CnF.

Berdyansk port, Ukraine, does not work after a storm and flooding. Work is underway to restore infrastructure.

VEGOILS MARKET The United States sold a record 4.13MMT of soybeans in the first half of July. 23% old and 77% new, in line with the 10-year trend. COFCO suspends work of one of the processing plants in Argentina due to the outbreak of coronavirus. Research and Markets estimates that the demand for soybeans is estimated to reach 124MMT by 2024. The gap between supply and demand could be around 94MMT in 2024, which is worth more than $ 40 million. Today Brazil is the main exporter, squeezing the USA out of the market. According to IMEA, producers have already sold over 98% of the 19/20 crop. Farmers keep their remaining stocks, awaiting price increases at the end of the year. US dollar weakens trading at 5.15 / $ 1.

China's rapeseed stocks are still below average and are declining seasonally. Domestic prices for rapeseed reached a 7-year high, which is explained by good processing margins and demand for meal from pork producers. Production in Ukraine may be reduced due to the reduction of the harvested area due to drought and low yield - about 2 t / ha today. EU demand is partially met by Canadian canola. Exports to the EU will offset the fall in canola trade with China, according to the Canadian Grain Commission and DTN.

According to market operators, there are problems with oil content in Ukraine. Rape is highly dependent on palm oil prices, which have been on the rise since April, despite a pullback at the beginning of the trading week.

The completion of the BR-163 highway in northern Brazil reduced the cost of transporting grain and soybeans from northern Mato Grosso to ports on the Amazon River by about 25% (from $ 45 / t to $ 33 / t for soybeans). Drivers can now make 6-8 trips per month.

Sunflower production in the Black Sea region, according to Sunseedman (Turkey): Moldova received more or less favorable rains. Taking into account the stable area (415 ha), the analyst predicts that the size of the new harvest may be at least 950 kMT (19/20 - 950 kMT).

Turkey: 1.525 MMT versus 1.6 in 19/20 against the background of 635 thousand hectares against 650 in 19/20 due to good climatic conditions. Cleaning has begun.

Romania: Reduction of areas from 1.2 million hectares to 1.175 million hectares, forecast of 3MMT production (19/20 - 2.85).

Bulgaria: Reduction of areas from 815 thousand hectares to 810, production estimate - 2 MMT (19/20 - 1.85).

Russia: Even if we take into account the slightly increased area under crops from 8.55 million hectares to 8.6 million hectares, it is most likely that production will be below the record level of the last season (19/20 -15.5 MMT) at 14, 75 - 15.25MMT. The official area in the Russian Federation is 8.443 million hectares.

Ukraine: an increase in acreage from 6.35 million hectares to 6.6 million hectares, production forecast - 16.5 MMT. The official area is 6.37 million hectares. The results of the crop tour in the Kiev, Vinnytsia, Cherkasy and Chernigov regions of Ukraine Maxigrain provides of a good harvest potential, but according to market reports, the southern regions are already on fire. In the photo - sunflower on the border of Ukraine and Belarus, sown on April 11, 2020.

MACROECONOMY TRENDS BASED ON WEEKER USD The inverse correlation between oil prices and the dollar has reached a record high in the past eight years. For two months now, oil prices have remained in one place, despite the noticeable growth of other raw material assets. The fundamental picture in the energy market is deteriorating, and only the depreciation of the dollar keeps oil prices at current levels, Bloomberg writes. The Turkish lira reacted rather calmly to the decision of the Bank of Turkey to keep the rate at 8.25% following the meeting on July 23, but this week stable trading in a narrow range ended.

The lira fell to a record low against the euro, while USD/TRY soared from levels around 6.87 to 6.95 in a few minutes. The pair very quickly returned to the range of recent weeks, but the evidence that the Turkish Central Bank, albeit for a short time, lost control of the situation, left an unpleasant impression on investors. The surge in volatility reminded market participants that the stability of USD/TRY since mid-June not only reflects the active intervention of the regulator, but is largely a consequence of the general weakening of the dollar. The euro retreated from its two-year high on Tuesday, as dollar sales weakened ahead of a two-day Federal Reserve meeting, following which investors expect the Central Bank's forecast to be confirmed. Changes in monetary policy are unlikely, but traders are pondering a shift in leadership focus on the Fed's perspective at a meeting that begins Tuesday.

Part of the dollar's weakness stemmed from political controversy over the next bailout package for the US economy. The Republican leadership of the U.S. Senate has submitted a proposal for the next $ 1 trillion coronavirus relief package. This bill is called the "HEALS Act".

But investors are worried about the details of the bill and the fact that the aid amounts are much less than those advocated by the Democrats in the House of Representatives who passed their bill in May. The Republican proposal was immediately rejected as Democrats argue it was too limited. The euro last traded 0.2% lower to $ 1.1732, down from a two-year high of $ 1.1781 hit a day earlier. The dollar has collapsed since May and has been completely crushed in recent days, as US failures with the coronavirus and declining returns have channeled investors into other assets.