EU Wheat Mostly Lower, Pound Sinks (Again)
12/03/13 -- EU wheat futures closed mixed, but mostly lower, with London wheat supported by the pound having another bad day at the office, falling to a fresh 2 1/2 year low against the dollar of 1.4832 on weak UK manufacturing data for January.
On the day London wheat closed with front month Mar 13 unchanged at GBP195.30/tonne and with new crop Nov 13 also flat at GBP184.00/tonne. May 13 Paris wheat was down EUR1.00/tonne at EUR232.50/tonne, the lowest close for a front month in 8 1/2 months.
Ukraine reported that they've already completed 410,000 ha of spring plantings, an unusually early start. Around this time last year only 32,000 ha of spring crops were in the ground, it was 113,000 ha in 2011 and zero in 2010 so they really are off to a flyer this year.
The Ukraine Ministry are so far only forecasting a grain crop of 50 MMT this year, up a modest 8.2% on last year. Other estimates are lining up around the 53-55 MMT mark, an increase in the region of 15-19%, although the national weather centre are predicting a crop 20-23% higher than last year. They would normally be aggressive early season sellers.
UkrAgroConsult are forecasting a winter rapeseed crop of 1.93 MMT this year, almost double last year's production of 1.07 MMT. Spring rapeseed plantings will be fairly minimal, giving an overall rapeseed crop of 2.0 MMT in 2013, up 62.5% on last year's output of 1.23 MMT, they say.
French soft wheat exports in January were 1.76 MMT, taking the marketing year to date to 9.48 MMT, a 5% drop on Jul/Jan in 2011/12. Of that total 5.71 MMT has been shipped to homes outside of the EU-27.
Russia exported only 63,000 MT of grain in the first week of March, of which only 19,000 MT was wheat. That brings the marketing year to date total grain exports to 13.9 MMT, a reduction of almost a third on last season. It is thought that, unlike Ukraine, the Russians may not be as aggressive as normal in the first quarter of next season as the government will be looking to rebuild intervention stocks run down to near zero by the end of 2012/13.
Reports suggest that the cash-strapped Egyptian government is looking to encourage increased domestic wheat production by building new silos for the 2014 harvest. They're seeking ways to be less reliant on wheat imports as the Egyptian pound declines, and want to buy more wheat locally.
Bangladesh have issued a new tender to import 50,000 MT of wheat, Japan are in for a 130,500 MT combo of US, Canadian,= and Australian milling wheat in their regular weekly tender, other than that fresh buying interest is scarce.
US winter wheat conditions continue to improve, albeit from a very low starting point. The latest word out of the top producing state of Kansas has good/excellent conditions up three points on last week to 27%, with second top producer Oklahoma up four points to 20% in the top two categories.
