EU Grains Mixed, Exports Remain Very Strong

21/03/13 -– EU grains were mixed against a backdrop of continued uncertainty surrounding Cyprus, where the banks will remain closed until Tuesday as the government continue talks with the ECB and Russia. They have until Monday to strike a deal or face collapse and potentially a eurozone exit. Exports of EU wheat meanwhile are very strong and well ahead of last season's pace.

London wheat closed with about to expire Mar 13 up GBP1.00/tonne at GBP198.75/tonne and new crop Nov 13 GBP0.75/tonne firmer at GBP185.50/tonne. May 13 Paris wheat was EUR1.75/tonne lower at EUR241.50/tonne. Mar 13 London wheat goes off the board tomorrow.

The leading French grain hub of Rouen exported 275,500 MT of grains in the week through to Mar 20. That was their busiest week since Nov 2011, according to Bloomberg. Of that total 220 TMT was wheat, with Algeria taking almost 97,500 MT, Morocco 87 TMT, Tunisia 27,500 MT and the UK nearly 8,000 MT.

The Germans are busy exporting grain too. Customs data there shows that they exported 691,512 MT of wheat in January, an increase of 61% on January 2012. That brings their 2012/13 marketing year-to-date todal to 4.17 MMT, 40% more than in the same period a year previously.

German barley exports in January were 228,429 MT, up 114% on a year ago. Marketing year-to-date barley exports are up 35% versus 2011/12 at 1.06 MMT.

Brussels issued 538,179 MT worth of soft wheat export licenses in the past week, taking the 2012/13 total to date to 14.69 MMT, up 43% on a year ago. That's once again well above the level required to hit our export target for the season.

Clearly interest in EU wheat remains high following Algeria's purchase of 350 TMT of what was probably French wheat yesterday. Libya bought 50 TMT of what was said to be Hungarian wheat today. Other tenders pending include Jordan in for 100 TMT each of milling wheat and barley and Iraq looking for 50 TMT of wheat.

Russia's grain exports in 2012/13 are down by almost a third on year ago levels at just under 14 MMT, and have now slowed to a trickle.

Whilst old crop demand remains strong, and stocks in Europe and the Black Sea are tight, the outlook for new crop is relatively good.

Early spring plantings in the Russian North Caucasian and Southern Federal Districts are currently said to be 317,500 ha, 88% of winter crops in the region are said to be rated good/fair.

Ukraine spring plantings are complete on 480,000 ha, or 16% of the planned area, according to the Ag Ministry there. They say that 91.6% of winter grains are in good to satisfactory condition. Agritel say that only 3-6% of Ukraine winter grains will need replanting this spring.

MDA CropCast increased their EU-27 winter wheat production estimate by 1.7 MMT from last week to 130.5 MMT, an increase of almost 3% on last year. Their EU-27 barley production estimate by 0.6 MMT to 54.2 MMT, with OSR output up 0.72 MMT from last week to 18.56 MMT.

The Spanish Ministry forecast their total wheat area for the 2013 harvest up 2.4% to 2.22 million ha, say Bloomberg. However "persistent rains in southwestern Spain are maintaining wetness there and high disease threats for wheat," say MDA CropCast.