EU Wheat Ends Higher On Production Concerns

Posted by Nogger - a legend in his own mind at 08:16 | Categorized as

04/04/13 -- EU wheat managed a bit more consolidation, with front month May 13 London wheat clawing it's way back above GBP200/tonne at one stage, although finishing just below that level at the close.

London wheat closed with May 13 up GBP0.20/tonne to GBP199.50/tonne and with new crop Nov 13 GBP0.65/tonne firmer to GBP185.00/tonne. May 13 Paris wheat settled EUR3.75/tonne higher at EUR244.25/tonne.

Concerns that the prolonged very cold weather across much of Europe is keeping winter crop development at minimal levels, and also seriously hampering spring plantings support the market.

The French National Institute for Agriculture Research said that French wheat yields could fall by 6% if the current cold snap lasts through to the middle of the month.

MDA CropCast left their EU winter wheat production estimate unchanged for now at 130.47 MMT, but noted that "cold temperatures across central and northern areas are maintaining very slow early spring growth of the wheat. Meanwhile abundant showers across southern and east central areas are maintaining wetness, especially across Spain and Italy."

They cut 1.0 MMT off their US winter wheat production estimate "due to increasing dryness in western and northern Plains wheat areas."

UkrAgroConsult cut their forecast for grain production in Ukraine this year to 52.4 MMT, citing spring planting problems. The Ukraine Ministry said that adverse weather conditions mean that they will not yet be allowing any further wheat exports in the current marketing year. There had been suggestions that they may be prepared to release a bit more wheat for export this month, providing that confidence was high for a bumper harvest in 2013.

Spring grain plantings in Ukraine are currently 24% complete. Things are only just getting going in Russia, with the Ministry saying that 634,600 hectares of the planned 30.3 million have been sown so far. Russian growers will also need to reseed failed winter grains on around a further 2.7 million ha, they added.

Meanwhile EU exports show no sign of easing up. Brussels granted export licenses for 468,000 MT of soft wheat this week, taking the total since the beginning of the marketing year to 15.6 MMT, up 46% on year ago levels. Including durum wheat, exports now stand at 16.56 MMT, less than 3 MMT away from the USDA's projected total for the entire season.

Tunisia bought 42 TMT of durum wheat and 25 TMT of feed barley in a tender yesterday. Morocco were said to have received no offers in tender to buy 160 TMT of US durum wheat for May shipment today. Jordan were said to have rejected all offers in it's tender to buy wheat due to high prices. That's the second time that they've done that in a week. India are said to be planning to tender to sell 5 MMT of wheat next week and are considering now accepting lower bids than they have been prepared to take in recent few weeks.