EU Wheat Down Again, Russia/Ukraine Influence Weighs

Posted by Nogger - a legend in his own mind at 20:10 | Categorized as

29/07/13 -- EU grains were lower again, with Aug 13 Paris wheat falling to a new lowest level for a front month since Dec 2011. The Nov 13 London wheat future ended at its worst in over a year too.

London wheat closed with front month Nov 13 GBP1.75/tonne lower at GBP161.00/tonne, Jan 14 was GBP1.10/tonne easier at GBP163.00/tonne and Nov 13 Paris wheat fell EUR1.50/tonne to EUR186.25/tonne.

Paris rapeseed took yet another stunning thrashing, it's almost two weeks since that closed higher, with the soon to expire Aug 13 down EUR10.25/tonne to EUR346.50/tonne. This demise isn't just solely confined to a technical nearby position however, Nov 13 was EUR5.75/tonne lower at EUR358.00/tonne.

The French wheat crop was 14% harvested as of last Monday, according to figures released Friday from FranceAgriMer. Local analysts say that yields and test weights are around average at this early stage. Protein levels are however said to be low, but that they may still be OK to meet export requirement levels.

Early French spring barley harvesting is also underway, with yields said to be good, but protein levels there are also said to be lacking.

The ongoing Russian and Ukraine harvest is weighing heavily on EU grains.

The Russian grain harvest is now at 33.6 MMT, as of Friday. Yields are said to be almost 24% more than a year ago at 2.85 MT/ha. Wheat accounts for 27.8 MMT of production so far, with yields at 3.07 MT/ha, up 24.8 % versus last year.

Trade estimates for the Russian wheat crop are still highly diverse, ranging from 45-54 MMT. Everyone is expecting spring wheat yields to drop off sharply once harvesting of that begins however.

Russian wheat prices are currently said to be around USD252/tonne (circa GBP164/tonne) for 12.5% milling wheat, with 11.5% milling wheat at USD245/tonne (below GBP160/tonne), FOB the Black Sea.

Ukraine said that they'd exported 867 TMT of grains so far this month (to Friday 26 Jul), including 449 TMT of barley, 272 TMT of corn and 143 TMT of wheat. They've also exported 167 TMT of OSR during the period, they added.

Iraq are tendering for 50 TMT of wheat, but generally buy far more. They have said that they will now consider importing French wheat following a visit to France last month by an Iraqi trade delegation.

Kazakhstan will harvest a 15 MMT of grains this year, according to local analysts KazAgro. That isn't a great deal more than the 14.7 MMT produced last year, and way below output of 26.9 MMT in 2011, they said.

Kazakh grain exports in 2013/14 will reach 7 MMT, according to the local Ag Ministry, less than half those of 2011/12.