London Wheat Ends Mostly Higher, But Lower For The Week

01/05/15 -- It was a predictably quiet day, with France and many other European countries closed for the May Day holiday. London wheat managed mostly small gains, perhaps aided by a sharply weaker sterling.

At the finish, May 15 London wheat was unchanged at GBP111.90/tonne and new crop Nov 15 closed GBP0.70/tonne higher at GBP120.25/tonne. That puts the old crop/new crop spread at GBP8.35/tonne versus GBP10.05/tonne a week ago. For the week, May 15 London wheat lost GBP1.50/tonne and Nov 15 fell GBP3.65/tonne. For the holiday-shortened week in Paris, May 15 wheat fell EUR5.00/tonne.

The pound closed the week more than 2 cents lower against the US dollar, and fell from close to 1.40 versus the euro to nearer 1.35 as it suffers from a typical pre-election dose of the collywobbles.

FranceAgriMer released their weekly crop progress report a day earlier than usual due to the holiday. They left French winter wheat and barley ratings unchanged from a week ago at 91% and 90% good to very good respectively. Spring barley ratings were cut 2 points in the good to very good category to a still impressive 95%.

The proportion of the French winter wheat crop at the 2-node stage is now 87%, up from 62% a week ago, but still behind last year's pace of 94%. Winter barley is 14% at the heading stage versus 1% a week ago and 45% a year ago. They said that 97% of spring barley is tillering versus 72% a week ago and 92% a year ago.

French corn planting was 75% complete as of Monday, up from 57% a week ago and 5 points ahead of this time last year. They said that 31% of the crop had emerged versus 7% a week previously and 30% a year ago.

One interesting development was the announcement yesterday that Senalia, the largest silo operator in the leading French port of Rouen, was closing it's doors for the intake of wheat until further notice. The reason given was the lack of demand (for export), although there's plenty of demand to deliver wheat into the facility. they said.

The silo is the larger of the two delivery points in Rouen for wheat against the May 15 Paris future, which currently has an open interest of more than 24,000 contracts - the equivalent of over 1.2 MMT. The contract now has little more than a week to go to it's expiry on May 11, so there could be some "unusual" price action in that between now and then.

French port data shows that Rouen exported less than 150 TMT of grain in the past week, compared to over 250 TMT the week before. Wheat exports were down 68% at less than 70,000 MT - a 12 week low. Barley was the biggest hitter, with 80,000 MT leaving the port bound for China.

EU wheat exports are still on track to set a new record this year however. Brussels reported that they had issued 587 TMT worth of soft wheat export licences this past week, up from 488 TMT the previous week, taking the season to date total to 27.7 MMT - a 10% rise on last season's record pace.

ADM Germany forecast this year's soft wheat crop there at 25.68 MMT, a 7.3% decline on a year ago. The German OSR crop will fall 13% to 5.44 MMT, they predict. Winter crop development is behind that of last year, but conditions are generally favourable although the crop could do with more rain, they said.

The EU-28 soft wheat crop will fall 6.3% to 139.14 MMT, they estimate.

Ukraine said that they'd exported 29.3 MMT of grains so far this season, including 10 MMT of wheat, 14.6 MMT of corn and 4.34 MMT of barley.

Early spring grains have been planted on 2.09 million ha in Ukraine, or 91% of expectations. Most of that (1.57 million ha) is barley. Corn sowing is 24% complete on 1.93 million ha. That's well behind last year's pace when well over half the crop had already been sown.

Bulgaria said that it's grain stocks as of Apr 1 were 44% up on a year ago at 3.18 MMT. Wheat exports so far this season are 22% down at 2.6 MMT. They've also exported 1.73 MMT of corn and 0.53 MMT of barley, they said.

The USDA's FAS in the Czech Republic said that crop prospects for 2015 there are good, but not as good as last year when the total grain output of 8.78 MMT was the highest since 1990.