EU Wheat Mixed, Treading Water
Old crop prices remain buoyed by the continued rapid pace of EU export sales which are now 46% ahead of this time a year ago, although the huge increase in UK imports has tempered domestic demand here. The exceptionally poor quality of this season's crop seems to have encouraged consumers to get their cover on earlier and in greater percentages than normal to ensure supplies.
FranceAgriMer said that winter wheat crop conditions there are 66% good/excellent versus 74% this time last year. The have 12% of the crop rated poor/very poor against 6% this time twelve months ago. They say that only 84% of the crop has reached the tillering stage versus 99% this time last year.
On the day London wheat closed with front month Mar 13 down GBP0.60/tonne at GBP203.55/tonne and new crop Nov 13 GBP1.35/tonne lower at GBP186.15/tonne. Mar 13 Paris wheat was EUR0.50/tonne higher at EUR243.00/tonne.
For the week as a whole that puts Mar 13 London wheat down GBP0.70/tonne, Nov 13 up GBP0.65/tonne and Mar 13 Paris wheat down EUR1.25/tonne.
US wheat has been under pressure this past few days after what is being called "the largest snow storm in years" hit the western plains before moving onto the Midwest, potentially relieving moisture stress for winter wheat planted in parched conditions and still in dormancy.
Weekly export sales for US wheat, delayed until today because of Monday's President's Day Holiday, were better than trade expectations of 350-600 TMT at 699,300 MT old crop and 56,600 MT new crop. China was a confirmed buyer of both old and new crop, although not in the volumes that have been rumoured of late. There was no confirmation of any sales to the UK or Russia however.
The IGC pegged world wheat production in 2012/13 unchanged from last month at 656 MMT, with ending stocks raised 2 MMT to 176 MMT.
"World output for 2013/14 is tentatively projected up 4% year-on-year, but much is expected to be absorbed by higher demand and stocks are forecast to rise by only 2 MMT," they added.
Following this week's Egyptian government tender, where they only bought just the one cargo (as they also did in their last tender) there have also been rumours in the market that private Egyptian buyers may also have been enquiring for wheat. The FT ran a story this week saying that the political instability there and weak Egyptian pound are behind Egypt's general absence from the market and that subsequently domestic wheat stocks are only half of what they would normally be.
The Egyptian government reportedly spend USD5.5 billion a year on food subsidies, much of which is used to buy wheat. Meanwhile GASC's high profile vice chairman and the man regarded as generally being responsible for the government's wheat purchasing program, Nomani Nomani, stepped down from his job this week.
