EU Wheat Exports At 2-Year High And 21% Up On Year Ago

06/12/12 -- EU grains closed little changed on the day with Jan 13 London wheat flat at GBP225.00/tonne, with benchmark May 13 down GBP0.25/tonne at GBP227.90/tonne and new crop Nov 13 up GBP0.35/tonne to GBP198.50/tonne. Jan 13 Paris wheat ended EUR1.00/tonne lower at EUR267.75/tonne.

The FAO reduced their 2012/13 world wheat ending stocks forecast by 3.4 MMT to 163.3 MMT - 10.9 MMT less than the USDA currently predict and the lowest since 2007/08.

They also said that world cereal stock-to-use is projected at 20.5%, down 2 points from 2011/12 and only 1.7 percentage points above the 2007/08 low.

Both the BOE and ECB left interest rates unchanged as was widely expected. There was no increase in QE either.

Brussels issued 712 TMT of soft wheat export licenses this past week - the largest weekly total in more than two years. That brings the total amount cleared for export so far this season to 8.0 MMT, a substantial 21% up on this time last year.

This comes despite lower production in 2012 and perhaps indicates that although European wheat prices are high relative to those in the US, maybe they aren't high enough yet. Certainly there is little evidence of any rationing taking place at these levels, exports are in fact accelerating.

At the beginning of November exports were only 6% up on last season, just five weeks later they are 21% higher as competition from the Black Sea dries up.

The USDA have Europe down to export 17.5 MMT of wheat in 2012/13. The average weekly pace needed to hit that target is only 336,500 MT.

New crop wheat gained on old crop months on both sides of the Channel today as concerns remain surrounding the health of what is in the ground, particularly in the UK and France. In addition of course there are also worries about what remains unplanted in the UK in particular.