Not Much Movement On EU Wheat, Strong Pound Hinders London Market

22/01/14 -- EU grains finished mixed, with Jan 14 London wheat ending unchanged at GBP150.50/tonne, whilst new crop Now 14 London wheat closed GBP0.15/tonne lower at GBP143.75/tonne - a new lifetime closing low for the contract.

Mar 14 Paris wheat was EUR0.75/tonne firmer at EUR193.00/tonne, Mar 14 corn was down EUR1.00/tonne to EUR172.50/tonne, whilst Feb 14 Paris rapeseed closed EUR2.00/tonne lower at EUR357.00/tonne.

Jan 14 London wheat goes off the board tomorrow, putting Mar 14 as the front month. The pound hit $1.6565 against the dollar today. That's close to it's best levels since August 2011, which didn't help London wheat's cause too much - particularly on new crop.

That won't improve 204/15 export prospects, whilst at the same time it will make corn imports even cheaper.

French wheat got support from strong export demand. Algeria bought around 500,000 MT of optional origin willing wheat for April/May shipment, priced circa $285-288 C&F, with France being the most likely origin.

Ukraine is expecting temperatures to dip to -10 to -15 C across the next few days, but recent snowfalls may help minimise damage to winter wheat.

Having only managed to buy 5,400 MT of grains at yesterday's intervention purchase - the lowest volume of the season so far - the Russian government fared little better today, picking up just 7,965 MT. That takes the total bought so far to only 557,415 MT which is way below their original intentions.

This would seem to indicate that domestic supplies are tightening. Russia exported 16.36 MMT of grains in the first half of 2013/14, this will fall to around 6 MMT in the second half of the season (Jan/Jun), said Rusagrotrans.

They said that Russia had exported 12.56 MMT of wheat, 1.93 MMT of barley and 1.68 MMT of corn in Jul/Dec. They project wheat exports for the remainder of the season at 3.4-3.9 MMT, with barley exports at 0.57 MMT and corn exports at 1.3-1.8 MMT. That would give full season totals of 16.0-16.5 MMT for wheat, 2.5 MMT for barley and 3.0-3.5 MMT for corn.

Russia will export 1.0-1.1 MMT of grains this month, down from 1.39 MMT in December, they added.

Hungary confirmed that they'd harvested 13.5 MMT of grains in 2013, a 30% increase on the previous year. That included 6.7 MMT of corn, up 41%, and 5 MMT of wheat, up 25%.

UkrAgroConsult estimated the Kazakh 2013 wheat crop at 14.5 MMT in clean weight, up from a previous forecast of 14.2 MMT and the 2012 harvest of 9.8 MMT.

They forecast Kazakh wheat exports at 7.2 MMT in 2013/14, versus 5.5 MMT a year ago. Ending stocks will rise to 4.2 MMT from 3.4 MMT, they added.

Euronext announced that they will launch rapeseed meal and oil futures contracts sometime later this year. They said that the volume traded in the Paris-based rapeseed contract last year was the equivalent of 93 MMT, which is roughly 150% of global production of the oilseed.