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March 31, 2023
Prices on the market are returning to levels more consistent with its fundamentals even though the trends are still bearish. The fundamentals are still comfortable, and the current levels seem consistent without any production disasters or major upsets in international demand. Europe’s fundamental sluggishness, therefore, seems to be offset by the tightness of soybean or palm oil. The European complex may now change by adjusting in line with other factors. In the short term, the various reports (particularly from the USA and Malaysia) may drive the market and bring more volatility.
The collapse of some banks harks back to 2008 and the start of a major global crisis. The bearish trend which began over a month ago was therefore considerably accelerated by financial traders who sold a great deal given the risk of economic slowdown, but the return of Chinese demand for numerous commodities is breathing some optimism into the market. About the new campaign, the situation is balanced out. On the one hand, US HRW wheat still suffers from a major water deficit; on the other, European and Black Sea wheat is enjoying beneficial and regular rainfall. The report on US crop condition (to be published on 3 April) is eagerly awaited.