EU Wheat Moves Higher On Argentine Weather Woes

Posted by Nogger - a legend in his own mind at 16:07 | Categorized as

17/01/12 -- EU grains ended with Jan 12 London wheat up GBP2.55/tonne to GBP158.00/tonne and Mar 12 Paris wheat up EUR1.75/tonne to EUR200.00/tonne. For London wheat this was the highest close for a front month since late September.

Spillover support from firmer US markets on the back of dryness in Argentina saw the market probe higher despite ongoing eurozone economic concerns.

News that the UK exported a hefty 442,797 MT of wheat in November, more than double the volume shipped in October, also lent support. That amount included almost 50,000 MT heading to the US, the first such shipment since the 2009/10 season. Low water in the Rhine pre-Christmas boosted demand for UK wheat on the continent it seems.

That means that the UK has now exported almost 1.3 MMT in the July/Nov portion of the 2011/12 marketing year.

Dryness in Argentina has prompted the Rosario Grains Exchange to cut it's corn production forecast there from 26.0 MMT last month to 21.4 MMT, 1.1 MMT down on last season despite an increase in planted area.

Ukraine has received "abundant" snowfalls since Sunday which will help protect winter wheat there from the worst of the winter. Even so 25-33% of crops may have to be replanted in the spring. That will probably lead to a sharp drop in wheat production in 2012, but possibly an increase in corn output.

Total grain exports from Ukraine so far this marketing year are up 42% on 2010/11 to 9.65 MMT. Russia, Ukraine and Kazakhstan combined have exported 30.7 MMT of grain in the first half of 2011/12 and have the potential to ship a further 28 MMT in remainder of the marketing year, say Agritel.

Crop conditions in Europe remain generally favourable with little winter kill threat, according to MARS (the Monitoring Agricultural ResourceS Unit).

On the international tender front Tunisia is shopping for 125,000 MT of wheat and the UAE is looking for 40,000 MT of wheat.