EU Wheat Remains Rangebound

25/11/13 -- EU grains closed mixed, but mostly a little firmer, with Jan 14 London wheat ending up GBP0.40tonne at GBP164.90/tonne, Jan 14 Paris wheat finishing EUR0.75/tonne firmer at EUR207.25/tonne, Jan 14 Paris corn EUR0.25/tonne weaker at EUR176.25/tonne, whilst Feb 14 Paris rapeseed slid EUR2.00/tonne to close at EUR376.00/tonne.

Fresh news is extremely thin on the ground. We're in require some much-needed direction in this market. London wheat hadn't closed outside the incredibly tight range of GBP163-165/tonne on the front month for the past 20 sessions prior to tonight's close, whilst Paris wheat hasn't finished outside the EUR200-208/tonne range since Oct 17.

There are hopes that the weekend interim deal on Iran's nuclear program will increase US wheat exports to the Middle Eastern country, even if it sees crude oil prices move lower.

European wheat exports continue at a pace. Germany shipped 3.6 MMT of grain abroad during the first three months of the season (Jul/Sep), up 44% on a year ago. Wheat accounted for 2.0 MMT of that total, up nearly 54%, and barley 865 TMT, up almost 173% compared with the same period in 2012.

Competition for wheat from Ukraine corn in particular however remains stiff. They exported 1.16 MMT of grains in the week to Nov 24, up almost 15% on the week prior. Most of that was corn, up 22.8% at 969.5 TMT - they've now exported a record volume of corn this month already.

The Ukraine Ministry said that the country had exported 12.8 MMT of grains in the Jul 1-Nov 22 period, a 15.8% rise on a year ago. That included 5.9 MMT of wheat, 1.95 MMT of barley and almost 5 MMT of corn. Exports of the latter are really accelerating as their record 2013 corn harvest comes to a close.

Out of the 7.73 million hectares of planted winter grains, 7.5 million has now emerged and 91% is in good/satisfactory condition, added the Ukraine Ministry.

Bangladesh is tendering to import 50,000 tonnes of wheat. Taiwan is tendering to buy 39,600 tonnes of US wheat and India issued a tender overnight to sell 70,000 tones of wheat.

We may see some short-covering in CBOT wheat this week, with funds sitting on a sizable short position and the markets closed for Thanksgiving on Thursday and only trading a shortened session on Friday.

Talk of weather-reduced wheat production in Australia and Argentina is also keeping the market nervous.

Closer to home, on the whole things aren't too bad. "Significant parts of western and central Europe faced overly wet conditions, mainly during the month of October. These conditions caused difficulties in some locations, but overall did not seriously hamper the sowing of winter crops. The warm temperatures and the normal precipitation levels were beneficial to crop emergence and early establishment during the second half of October and the first two weeks of November across most of Europe," said the EU Commission's MARS unit.

"Winter wheat experienced some sowing delays in France, but these were compensated for by rapid early development and conditions were particularly favourable for sowing in eastern Europe and the southern Mediterranean region," they added.