EU Grains Little Changed - Strong Pound Weighs On London Wheat

18/09/13 -- EU grains closed mixed in largely sideways trade. Nov 13 Paris wheat has now closed within the EUR180-190/tonne range for all but two trading sessions out of the last eight weeks.

Nov 13 London wheat settled GBP0.05/tonne easier at GBP151.20/tonne whilst Jan 14 was also GBP0.05/tonne lower at GBP154.15/tonne. Nov 13 Paris milling wheat rose EUR0.25/tonne to close at EUR185.00/tonne. Nov 13 Paris rapeseed was unchanged EUR369.00/tonne.

Paris wheat garners support from the frenetic early pace of EU exports. Brussels will reveal if that has continued again this past week tomorrow. Last week's exports were a marketing year high, and took the total volume of export licences granted so far to 5.2 MMT, well over double where things stood this time a year ago. Even so the USDA currently only have EU-28 exports to increase by a modest 3.6% this year.

The first import/export stats of the 2013/14 season for the UK came out, revealing that we imported 328,511 MT of wheat in July, an increase of 94% versus July 2012. That's also more than 10 times the volume that was exported. The top suppliers were France and Germany, providing over 100 TMT each, but there were also some surprise names in the list of other countries exporting wheat to the UK.

Other suppliers were Denmark (38 TMT), Finland (11 TMT), Eire (4 TMT), Romania (4 TMT), Poland (3.7 TMT) and Sweden (2 TMT).

UK barley exports were down by more than half to 10,467 MT in July. OSR exports also slumped by more than two thirds to only 4,616 MT.

On the import front, the UK shipped in over 39 TMT of rapeseed in July versus just 1,307 MT in the same month last year due to the heavily delayed start to this year's harvest.

The UK also continues to import corn with gay abandon, bringing in 110,109 MT versus 77,768 MT in the same period a year ago, with France and Ukraine the top suppliers.

Heavy rains in Ukraine are delaying progress with winter wheat plantings and also preventing them from wrapping up the last of the winter OSR sowing. Corn harvesting will also be impeded.

Russia's harvest continues to limp along, now standing at 71.5 MMT off 69.1% of the planned area. Wheat accounts for 44.9 MMT of that off just over 70% of the plan, with yields still hanging on in there at 2.55 MT/ha, up 37% on last year, and only a smidgen below those of 2011 at this time - 2.56 MT/ha. They've also now brought in 14 MMT of barley off 77.1% of the plan, along with 1.1 MMT of corn (off 9%) and 1.6 MMT of sunseed (off 9.8%).

The minutes of the Bank of England's MPC meeting earlier this month were released today, showing a unanimous vote to hold interest rates and QE unchanged. The pound remains strong against the US dollar and euro, which is weighing on London wheat. Sterling may strengthen further against the dollar if Fed Chairman Ben Bernanke doesn't suggest that they will soon start "tapering" their own financial stimulus measures when he speaks later this evening.