Mar 16 London Wheat Hits Lifetime Low, But Old Crop/New Crop Spread Keeps Wdeining

29/01/16 -- EU grains finished the day mixed, with Mar 16 London wheat settling at a news lifetime contract low and at the lowest on front month since May last year.

At the close of trading, Mar 16 London wheat was down GBP0.50/tonne at GBP108.10/tonne. In Paris, Mar 16 wheat was down EUR0.75/tonne at EUR163.75/tonne, Mar 16 corn was up EUR0.50/tonne at EUR155.00/tonne and May 16 rapeseed was up EUR0.25/tonne to EUR363.50/tonne.

For the week, Mar 16 London wheat was GBP2.20/tonne lower, with Mar 16 Paris wheat EUR0.75/tonne easier, Mar 16 corn down EUR1.00 and May 16 rapeseed EUR0.50/tonne weaker.

On the old crop/new crop spread, May16/Nov16 wheat closed at -GBP10.45/tonne tonight versus -GBP9.00/tonne a week ago and -GBP8.50/tonne for the week prior to that.

The European Commission raised their view on EU-28 soft wheat exports this season by 1.2 MMT, taking these up to 29.1 MMT. That's 4 MMT down (or -12%) from the record 33.1 MMT shipped out a year ago, but now means that we are now more than in line to match that target using this week's cumulative total of -11.2%.

Their estimate for 2015/16 soft wheat ending stocks is now 15.8 MMT, down 1.8 MMT on their previous forecast, but still the highest since 2009, and up 4.8 MMT from the end of last season.

The USDA's FAS in Ethiopia said that they expect the country to need to import around 2.5 MMT of wheat this season (Oct 15/Sep 16) following another crop badly reduced by drought. Normal imports would be around 1 MMT.

Egyptian flour millers have already started lobbying the government there to reduce the current 25% import duty on wheat as they fear a need to increase the quality of this year's crop before it has even been harvested,

There's talk of a possible Russian announcement on wheat export duty changes on Feb 3.