EU Grains Mostly Lower On The Day, Higher On The Week

11/10/13 -- EU grains closed mixed but mostly lower on the day, but higher for the week. Nov 13 London wheat settled GBP0.25/tonne firmer at EUR163.00/tonne, whilst Jan 14 was down GBP0.25/tonne at GBP163.75/tonne. Nov 13 Paris milling wheat was up EUR0.50/tonne at EUR199.25/tonne whilst Nov 13 Paris rapeseed fell EUR5.00/tonne to EUR372.75/tonne.

For the week, Nov 13 London wheat was up GBP4.25/tonne, with Nov 13 Paris wheat EUR4.75/tonne higher and Nov 13 Paris rapeseed EUR4.75/tonne firmer.

Strong underlying demand for EU wheat was highlighted again, even if Egypt didn't like the look of the prices in their cancelled tender, with Brussels granting 839 TMT of soft wheat export licenses this past week. That was the best weekly total of the season so far and takes the total volume of export licences granted so far this season to 7.75 MMT. That's a very respectable total little more than a quarter of the way into the season.

It was interesting to note that Romanian wheat was the cheapest in the Egyptian tender at USD274.64/tonne, closely followed by French wheat at USD276.25/tonne and then Russian wheat at USD278.00/tonne.

The big question now is can Nov 13 French wheat manage to get above EUR200/tonne and stay there? It didn't manage to hold there yesterday, and only traded up to EUR199.50/tonne today.

If wheat demand continues to hold up at these levels then it could certainly push above EUR200/tonne, although Paris corn closing at EUR173/tonne is a negative factor.

The French corn harvest is just getting underway at 2% complete as of Oct 7, say FranceAgriMer. They left good/very good corn crop condition ratings unchanged on a week ago at 57%. This time last year 14% of the French corn harvest was already in.

Plantings for the 2014 harvest are well advanced compared with this time a year ago though. FranceAgriMer said that winter barley is 43% planted versus 16% last week and 19% a year ago. Winter wheat is 23% planted, up from 9% a week ago and 12% this time last year.

Russia's grain harvest is almost 85% complete at 82.9 MMT in bunker weight. Wheat accounts for 50.6 MMT of that off almost 89% of the planned area. Both SoveEcon and IKAR cut their 2013 grain harvest forecasts today, to 87 MMT in clean weight (incl. 50 MMT of wheat) and 86 MMT (incl. "about" 50 MMT of wheat) respectively.

Russia exported 2.88 MMT of grains in September, of which 2.11 MMT was wheat. That takes the 2013/14 marketing year total to date to 9 MMT, a 12.6% increase on last year. The Ministry's target for full season exports is 18-20 MMT.

Australia's wheat harvest is still only in it's early stages, but there's a lot of optimism for a very good crop there, with estimates ranging from 24.5 MMT to 26.0 MMT versus 22 MMT in 2012/13.