EU Wheat Follows US Market Higher
On the day London wheat closed with front month Mar 13 up GBP0.80/tonne at GBP202.65/tonne and new crop Nov 13 GBP0.70/tonne higher at GBP186.00/tonne. Mar 13 Paris wheat was EUR1.75/tonne firmer at EUR248.25/tonne.
A flurry of fresh tender activity promoted ideas that prices have fallen sufficiently low to stimulate global demand. Saudi Arabia yesterday tendered for 110 TMT of soft wheat and 440 TMT of hard wheat for Jun/Aug shipment. South Korea bought 21,800 MT of Canadian wheat overnight. Bangladesh bought 50 TMT of optional origin wheat for March shipment. Tunisia filed tenders for 50 TMT of optional origin milling wheat and 25TMT of optional origin barley for April shipment.
In an interesting development it was reported that Germany had bought 60 TMT of Brazilian feed wheat for import. It was only a few months ago that the Germans were selling milling wheat to Brazil. The USDA didn't confirm any US wheat sales to Europe or Russia, as has been persistently rumoured of late, in today's weekly export sales report. They did however include sales of 134,800 MT of old crop and 82,500 MT of new crop to "unknown" destinations.
Brussels issued 387 TMT of soft wheat export licenses this past week, taking the marketing year total to 13.1 MMT, up 44% versus 9.1 MMT a year ago. EU exports continue to be aided by the euro falling to a 7-week low against the US dollar this week.
Bloomberg reported that the leading French export hub of Rouen shipped 247 TMT of grains in the past week, up 42% on a week ago and the best weekly total since Dec 2011. At 211 TMT almost all of that was wheat. Morocco (120 TMT) and Algeria (55 TMT) were the principal two homes.
In contrast Russia's January grain exports were reported at only 433 TMT, the lowest in the last two seasons.
Toepfer said that they expect the world wheat crop to rebound 4.3% to 682 MMT this year, with corn output increasing 14.3% to a record 976 MMT.
Agrimoney reported that UK spring barley plantings could come in at 830,000 ha this year, citing Evergrain, the Swiss-based malting barley trader. That would represent a leap of over 34% on last year's 618,000 ha and be the highest level since the 1980's. The percentage of the crop suitable for malting this year may fall to around 39% versus a more normal level of clser to 50% in a typical year however due to lack of seed, they added.
On the EU weather front MDA CropCast said that "showers are improving moisture in Spain, while drier weather in France, Germany, and Italy is easing wetness." They left their forecasts for EU wheat, barley and rapeseed production in 2013/14 all unchanged from last week at 132.04 MMT, 52.9 MMT and 18.49 MMT respectively.
IKAR estimated 2013/14 Russia grain crop at 87-92 MMT and pegged the exportable surplus at 22.0 MMT. The Russian Ministry are estimating total grain production for 2013/14 at 95 MMT versus the Russia Grain Union's estimate of 90 MMT, both are well above the 70.7 MMT produced in 2012/13.
UkrAgroConsult estimated Ukraine’s 2013/14 wheat exports at 8-9 MMT versus 6.3 MMT this season.
A struggling Egypt are said to be looking at ways of changing the way they do business and abandoning its regular public wheat tenders, according to a report on Reuters today.
