EU Grains Modestly Higher, Egypt Business Supports
03/07/13 -- EU grains closed mostly little higher, recovering a bit of ground from recent steep declines. Egypt re-entering the market after a four month absence yesterday added a bit of support. One swallow however doesn't make a summer.
On the day London wheat closed with the soon to expire Jul 13 future up GBP0.25/tonne to GBP154.50/tonne and new crop Nov 13 GBP0.50/tonne firmer at GBP165.75/tonne. Front month Nov 13 Paris wheat was up EUR1.50/tonne to finish the day at EUR194.75/tonne.
In a market desperate for a bit of positive news Egypt seem to have provided it. However the purchase of 180 TMT of wheat, the first such tender since February, when they used to be in the market every 2-3 weeks in previous seasons hardly seems to herald a return to "the good old days" for what was previously the world's largest wheat buyer.
France are still said to be considering Egypt's request for help with imports and storage. Considering how to say no without incurring an Egyptian backlash more like.
The Egyptian tender, won by Ukraine and Romanian wheat, also highlighted the fact that EU, US and even Russian wheat are now getting undercut in the new crop market.
Early barley harvesting is now underway in France, with yields said to be significantly better than expected.
Things do seem to be improving for Europe, with even our own wheat and barley crops here in the UK now looking pretty decent. The IGC upped their forecast for EU wheat production from 138.2 MMT to 139.4 MMT earlier in the week. That's 2 MMT more than the USDA currently estimate and 7% up on last season's showing. The USDA's FAS attache in Europe today forecast a wheat crop here of 138.4 MMT, 1 MMT above the official USDA estimate.
China bought 300 TMT of new crop Australian wheat for Jan shipment, adding to recent purchases from France and the US. This development could provide some bullish impetus going forward. Rabobank estimate that China may import up to 10 MMT of wheat this season, far more than the USDA's current 3.5 MMT estimate.
Russia sold 28,340 MT of intervention grain today, taking the total volume cleared since sales began in October to 3.67 MMT.
Algeria are tendering for 50 TMT of feed barley for August shipment of optional origin. There should be plenty of willing sellers for that from Europe and the Black Sea. UK feed barley prices are reportedly down to around GBP130-135/tonne off the combine, depending on location.
French port union workers announced they will stage a 24 hour strike tomorrow.
