London Wheat Plays Catch-Up, Paris Ends Flat

27/08/13 -- EU grains closed mixed. London wheat was sharply higher after the markets here were closed for yesterday's Bank Holiday.

London wheat closed with both Nov 13 and Jan 14 GBP4.45/tonne higher at GBP161.20/tonne and GBP163.45/tonne respectively, whilst Nov 13 Paris wheat closed unchanged, having done all its gaining yesterday, at EUR191.75/tonne.

For front month Nov 13 London wheat this was the highest close since Aug 2nd.

Wheat doesn't have a particularly bullish story of its own, so is instead attaching itself to soybeans and corn. It remains to be seen how long it can manage to do that for. The big question that everyone is asking themselves is does this mean that the bottom is in for wheat, or is this just a minor correction?

The Russian Ag Minister forecast a wheat crop there of 50 MMT, up by a third on last year. Exports are estimated at 15 MMT, versus 11.3 MMT in 2012/13. He now estimates the total Russian grain output at 88-93 MMT, with exports of 20 MMT.

Kazakhstan's delayed by rain grain harvest is at the 1.92 MMT mark, with yields up 73% versus a year ago at 1.35 MT/ha.

Tunisia's 2013 grain crop is poor. They are tendering to import 84 TMT of soft milling wheat and 75 TMT of feed barley of optional origin for Sep/Nov shipment. They are expected to need to import 1.6 MMT of grain, mostly wheat and barley, as a result of drought earlier this year.

Iran has said that its barter deal to swap electricity for wheat with Pakistan has been scrapped, without elaborating further. Pakistan have been buying imported Black Sea wheat quite heavily themselves of late.

Talk of frost damage to Argentine wheat is premature, as the crop is only just in the ground and plants are too young to have suffered any appreciable set-backs say most analysts.

Oil World raised its forecast for global rapeseed production to an all-time high 64.8 MMT, up 1.3 MMT from it's previous estimate.

Production will be 20.8 MMT in the European Union, up 6.8% from a year earlier. Canada’s crop will be 6.5% larger at 14.8 MMT whilst the harvest in a bloc of former Soviet Union countries will be 41% higher at 4.5 MMT, according to a report on Bloomberg.

"In the EU, better-than-expected rapeseed harvests in Poland, the Czech Republic and Romania will boost the crop. The bloc’s rapeseed crushings will fall 1.3% as 'large and attractively priced supplies of sunflower seed and sunflower oil' place pressure on European rapeseed oil prices and damp demand. 'Sluggish' demand from the biodiesel industry will further reduced rapeseed consumption, the report added.

Pakistan bought 45 TMT of what was probably Ukraine origin rapeseed for immediate shipment.

The deputy director of the Hydrometeorological Centre of Ukraine said that forecast rains will be beneficial for the sowing of winter grains and oilseeds.