EU Grains Consolidates, China Maybe Bought French Wheat

19/06/13 -- EU grains traded higher for a second day, seemingly on ideas that the recent slump in prices may have been overdone.

Jul 13 London wheat finished the day GBP1.30/tonne firmer at GBP163.05/tonne, and with Nov 13 ending up GBP2.05/tonne at GBP170.05/tonne. Nov 13 Paris wheat settled EUR3.00/tonne steadier at EUR199.75/tonne.

A report on Reuters suggested that China may have bought around 200 TMT of new crop French wheat.

ODA said that some French fields may have sustained recent hail damage in the Centre, Charentes and Pays-de-la-Loire regions. Other reports suggest that thunderstorms yesterday damaged crops in the South West too.

Russia sold 34,290 MT of intervention grains at auction, bringing the total sold so far since sales began last October to over 3.5 MMT.

Russian President Vladimir Putin said that the country will not be issuing a grain export embargo in 2013/14.

Ukraine's Ag Ministry said that the country has harvested 300 TMT of grain so far this season with an average yield of 2.3 MT/ha versus 1.6 MT/ha a year ago.

The latest figures from UK Customs & Excise show Jul12/Apr13 domestic wheat imports at 2.38 MMT, an increase of 325% on the same period in 2011/12. April imports were almost 256 TMT versus exports of only 28 TMT.

These imports are already within touching distance of the current Defra forecast for full season of 2.537 MMT. With imports currently running at around 250 TMT/month it looks likely that we will exceed this official estimate and probably end up importing around 2.9 MMT of wheat in 2012/13.

That means that despite last year’s disappointing harvest, UK ending stocks at the close of the current season could actually be well over the 2 MMT mark, which is historically rather high.

Corn imports into the UK in 2013/14 are also expected to continue to be high. New crop Ukraine corn traded into South Korea yesterday at USD259/tonne C&F, the equivalent of around GBP166/tonne.

Ukraine corn is offered in the market at USD222/tonne FOB for October, circa GBP142/tonne before freight and discharge costs are added. Ukraine origin milling wheat is quoted at USD256/tonne (or GBP163.50/tonne) for July shipment FOB. French milling wheat is offered at EUR192/tonne (GBP164.75/tonne) for July delivery to Rouen and French new crop feed barley is around EUR179/tonne (GBP153.50/tonne), say Agritel.