EU Wheat Mostly Lower As Egypt Buys From Russia

19/11/13 -- EU grains closed mixed, but mostly lower, yet still range-bound. Egypt (or was it Russia) surprised the market by picking up a cheapest offer for 120 TMT of Russian wheat for Dec 11-20 delivery in their tender, when everyone was expecting a French clean sweep.

The session ended with Nov 13 London wheat down GBP0.50/tonne to GBP164.00/tonne, Jan 14 Paris wheat EUR0.25/tonne weaker at EUR203.75/tonne, Jan 14 Paris corn unchanged at EUR172.75/tonne and Feb 14 Paris rapeseed down EUR5.25/tonne at EUR372.25/tonne.

The outcome of the Egyptian tender was a surprise, and shook market confidence a little in that EU wheat - and particularly that from France - now more or less has free rein on purchase orders from North Africa for the remainder of 2013/14.

Whilst French wheat dominated the bidding, it was two cargoes of Russian wheat priced at USD305.66/tonne including freight that won the day.

Other news was very thin on the ground today. The Russian grain harvest is winding down at 94.1% complete, producing a crop of 93.6 MMT to date. That includes 54 MMT of wheat off 97.9 % of plan.

Russian winter grains plantings remain stalled at 14.4 million hectares versus 15.8 million in 2012 and the government's original target of 16.4 million.

The Russian Ministry announced today that they had bought 29,970 MT of wheat for the intervention fund. Total purchases now stand at 312,390 MT, of which 278,785 MT is wheat.

Ukraine farmers have managed to sow 7.73 million hectares of winter grains, including 6.3 million of wheat, according to UkrAgroConsult. That's down 4.1% from a year ago. The original target was around 8.2 million hectares.

"While that means a decline of 353,000 hectares of winter wheat year on year, many investors had expected a far bigger decline after persistent rains and cold hampered early seeding progress in many areas," said Agrimoney.com.

The Ukraine Ministry said that 95% of winter sowings had emerged, and that 91% of crops were in good to satisfactory condition.

The Ukraine Ministry also said that the country had exported a record volume of corn last month, at 1.3 MMT. The top homes were South Korea and Egypt. They are now around 85% through their 2013 corn harvest.

Cheap supplies of world, and Black Sea corn in particular, are seen keeping a lid on any potential rallies in UK wheat. The outlook for a much better, and maybe even record, UK wheat crop in 2014 is also an upside limiting factor.

Libya are said to have bought German wheat on Friday. EU wheat sales are already well advance versus 2012, and comfortably on track to meet expectations for record exports in 2013/14.