EU Wheat Gives Up Early Gains
However, US wheat and corn markets turned lower in afternoon trade, dragging European grains down with them.
The EU markets closed the day with Mar 13 London wheat down GBP0.50/tonne to GBP205.00/tonne, benchmark May 13 also falling GBP0.50/tonne to GBP207.00/tonne and new crop Nov 13 GBP0.40/tonne weaker at GBP187.00/tonne. Mar 13 Paris wheat declined EUR0.75/tonne to EUR245.00/tonne.
Russia sold a just short of 65 TMT of it's intervention grain stocks in what has become a regular twice weekly offering, taking the total sold since sales began on Oct 23 to 1.88 MMT. The Russian Statistics Agency said that grain stocks on Feb 1 were 22.6 MMT - a fall of almost 30% on a year ago. There's continued talk that they will import wheat from the US, and maybe Europe too, but there has been no official confirmation as yet.
An unusually early start to spring planting in Ukraine is said to be on the cards, due to much warmer than normal temperatures. The lack of snow cover may prove to be a problem if winter there proves to have a sting in it's tail however.
The trade awaits the results of the Iraqi wheat tender which closed at the weekend. Australian offers were said to be the cheapest. Their last tender was won by Australian and Canadian wheat.
Morocco said it had imported over 14% more grain in 2012/13 (to the end of Jan) than in the previous season. Total imports stand at 3.43 MMT, including 1.37 MMT of wheat and 1.53 MMT of corn. The main supplier of the wheat was Ukraine (640 TMT), France (490 TMT) and Canada (440 TMT). Almost all the corn came from Brazil (1 MMT) and Argentina (500 TMT). They also announced that they'd bought 176 TMT of soft wheat on the local market in a tender over the weekend.
Indian ministers are said to be seeking government approval to increase the volume of wheat permitted for export in 2012/13from 4.5 MMT to 5.0 MMT. Whilst the Ministry are standing by a small drop in production from last year's record 94.9 MMT to 92.3 MMT this year, some private analysts are forecasting wheat production to match, or even better, last year.
India is already said to have made new crop sales of 500-750 TMT into Asian homes in South Korea, Taiwan, Thailand, Malaysia, Indonesia, and Vietnam for shipment April/June.
In the US: "A strong storm is predicted tomorrow in the Great Plains causing heavy precipitation in hard red winter wheat. A mixture of rain, sleet and snow is expected in Kansas and Oklahoma, bringing at least 0.75 inch but up to 1.25 inches of moisture," say Martell Crop Projections.
"Southern Great Plains precipitation has increased in January and February with a higher frequency of winter storms, all 3 major wheat states now currently reporting near-normal winter moisture. Drought worries are not over, however, due to very dry subsoil from historic drought last summer and fall. Oklahoma, the US second largest wheat state, has benefited from increased winter precipitation. Around 2 inches of rainfall has occurred, against 2.6 inches, normally, December to the present. Going back to mid July, however, the Oklahoma wheat moisture deficit is 5 inches," they add.
Fund money continues to sell corn and wheat on the Chicago market. Last Friday's Commitment of Traders report shows trend-following funds (non-commercials net of index funds) held a net long position of 39,103 contracts in CBOT corn as of last Tuesday night, down a staggering 59,316 contracts on a week previously. The same trend-following funds held a net short position of 67,578 contracts in CBOT wheat, up 5,925 for the week.
