EU Wheat Dragged Lower In Afternoon Trade
Morning trade was higher, buoyed by ideas that fund selling might finally be exhausted, but the screens turned red in the afternoon following the release of the USDA's weekly export sales report. Even though the latter was actually friendly for wheat, it was net negative sales on old crop soybeans of -109,200 MT that caught the market's attention the most. That quickly sent soybeans 12-15 cents lower, dragging corn and wheat down with it.
Weekly wheat sales beat trade expectations of 275-400 TMT at a combined 706 TMT, with the vast majority of that old crop business. Even so, there was no sign of Brazil, Russia or the UK - all of whom have supposedly been enquiring after US wheat in the past couple of weeks. There was however a 56 TMT sale to China.
Modest weather improvements on the US Plains have put wheat under a bit of pressure this week, although opinion is divided on how much real good these will do. "Rain and snowmelt from a winter storm in the Southern Great Plains, while beneficial, was less than anticipated. Oklahoma and Texas panhandle wheat received 0.25 - 0.50 inch of moisture, and up to 0.75 inch in widely scattered areas. Kansas received 0.50 to 1 inch rain in a swath across the central part of the state, but virtually nothing near the Oklahoma-Kansas border, where drought is most severe," said Martell Crop Projections.
Strategie Grains cut their EU-28 soft wheat production forecast for 2013/14 by 1.1 MMT from last month to 132.2 MMT. That adds to the 1.7 MMT reduction that they issued in January. Lower production potential from France and the UK was the reason (down 1.4 MMT between them), which was only partially offset by improved prospects in Eastern Europe. Even so, 132.2 MMT is still 6% more than produced in Europe last year.
EU-28 corn production was raised 900 TMT from last month to 65.5 MMT, with barley output also rising from 54.7 MMT to 55.1 MMT. The corn number represents an increase of almost 20% on production in 2012, whilst the barley rise is a more modest 1.3% rise.
Oilseed rape output in the EU-28 was forecast 6.25% higher than last year at 20.4 MMT, with Germany's crop up 12.5% to 5.4 MMT, France's down 5.5% to 5.2 MMT and the UK harvest seen better than last year at 2.8 MMT. Sunflower production in the EU-28 is seen rising 11.4% in 2013 to 7.8 MMT.
FranceAgriMer said that EU-28 soft wheat plantings for this year's harvest will rise 3.5% to 23.8 million hectares. There were increases for France (+2%), Germany (+3%), Spain (+4%), Romania (+9%), Poland (+10%) and Italy (+11%). Only the UK is forecast to show a significant reduction in area, down 11% to 1.78 million ha.
Saudi Arabia are said to have bought 1 MMT of barley this month, mainly from Australia and Canada, but also some from the Black Sea. They are the world's largest importer of the grain, accounting for around 40% of all world barley trade.
Algeria bought 400 TMT of optional origin soft wheat overnight, but said to be highly likely to be French grain. Export data out of France reveals that their leading grain export port of Rouen shipped 228 TMT of grain in the week through to Feb 13 (almost 200 TMT of that was wheat) - an increase of 32% on the week previously. Algeria was the main home, taking 108 TMT, but there was also 7,865 MT destined for the UK in amongst that. Turkey took 30 TMT of French barley.
In other tender news, Jordan is in again for 100 TMT of wheat, having bought 50 TMT earlier in the week. South Korea bought 55 TMT of what is believed to probably be Indian feed wheat for Jun/Jul shipment as the Indians step up their sales of new crop. They reportedly got a best bid of around USD311/tonne FOB for 150 TMT of old crop wheat offered in a tender for shipment by the end of March as they continue to make room for the new harvest.
