EU Wheat Jumps As Ukraine Bans Exports
For the week overall that places Nov 12 London wheat GBP4.60/tonne higher and Nov 12 Paris wheat up EUR4.00/tonne with London wheat punching above it's weight once again.
News that Ukraine is to ban wheat exports starting Nov 15th quickly saw the market jump mid-morning, even though it has been known for some time that the government there had agreed a 5 MMT cap on wheat sales this year.
They've already exported 6.6 MMT of grains since the 2012/13 marketing year began on Jul 1st, of which 3.35 MMT is wheat, 1.85 MMT corn and 1.35 MMT barley.
The corn harvest in Ukraine is ongoing, and that will be the focus of their grain exports for the remainder of the season. Bringing in just under 39 MMT so far, the grain harvest there is said to be 89% complete with yields averaging 2.94 MT/ha, 13% down from 3.39 MT/ha a year ago.
The Kazakhstan harvest is just about complete, producing 14.55 MMT of grain in bunker weight, with yields averaging only 0.97 MT/ha, down nearly 45% from last year's bumper harvest.
With Ukraine now officially out of the international wheat market it remains to be seen whether Russia will follow suit at the risk of upsetting their new pals in the World Trade Organisation. Whether they do or they don't is immaterial really, they can already effectively be ruled out as large scale competitors in the global wheat trade until the summer.
That leaves Europe well placed to step up their export attempts - Brussels issued just under 500 TMT of soft wheat export licences this week. Even so Argentine wheat is probably the most competitively priced wheat in the world at the moment, and their harvest will be kicking off soon.
The harvest in Australia is already underway, with the majority of private estimates around the 21 MMT mark, well below last season's record 29.5 MMT crop, but high carry-in from last year could still potentially see them export 17 MMT or so of wheat in 2012/13.
Yesterday's dismal UK wheat export figures for August suggest that we will be lucky to ship out more than half a million tonnes of wheat this season, only a fifth of 2011/12 sales. Wheat imports meanwhile are racing ahead
