EU Wheat Mixed, Have Prices Fallen Enough For Now?

08/08/13 -- EU grains closed mixed. Harvest pressure remains, but there is also a feeling creeping in that maybe wheat prices have fallen enough for now. There has certainly been more activity on the international tender market of late, suggesting that prices at one year lows are stimulating some buying interest, even if most of the high profile business is going to Black Sea sellers.

On the day Nov 13 London wheat closed GBP0.80/tonne lower at GBP156.95/tonne, and with front month Jan 13 slipping up GBP0.25/tonne to close at GBP159.00/tonne. Nov 13 Paris wheat settled EUR0.25/tonne lower at EUR183.00/tonne.

Whilst the EU winter wheat harvest is only just getting going in some countries, the winter barley harvest is drawing to a close in many.

The Spanish Farmers Association say that barley production there this year could rise more than 63% to 9.8 MMT. The French winter barley harvest is almost finished and spring barley cutting is well underway. ODA have raised their forecast for the overall French barley crop from 10.5 MMT to 10.9 MMT, although that's still below last year's output of 11.4 MMT.

The German winter barley harvest is also nearing completion and is expected to come in at around 8 MMT versus 7 MMT last year. The all barley crop is estimated at around 10 MMT.

At home a UK barley crop of around 6.8 MMT is expected, up 23% on last year, thanks to a sharp increase in area. "Exports as well as additional feed demand are likely to be a key element of balancing the supply and demand given the large increase in spring plantings. Quality will determine how much can be exported to the continent," say the HGCA.

Brussels issued 367 TMT of soft wheat export licenses this past week, bringing the 2013/14 marketing year to date total to 1.96 MMT. Barley export licenses were 273 TMT, bringing the 2013/14 YTD total to 1.4 MMT.

French customs data for the full 2012/13 season reveals soft wheat exports up 7% to 17.1 MMT. Shipments to non-EU buyers were up 16% at 9.9 MMT. Sales within Europe fell 5% versus 2011/12.

Morocco has upped its duty on soft wheat imports from 17% to 45%, essentially to more of less bring them to a halt following a huge jump in domestic production of 90% this year. Imports won't be necessary for the rest of 2013, said the government.

Hungary's Farm Ministry estimated their 2013 wheat crop at 5.1 MMT, up 27.5% versus 4.0 MMT a year ago. Bulgaria's wheat crop is seen at an 8-year high of 4.7 MMT, up 7% versus last year, which should allow exports of around 2 MMT in 2013/14.