Nogger's Blog

18/11/13 -- EU grains closed mostly a little lower, although Nov 13 London wheat ended GBP0.50/tonne firmer at GBP164.50/tonne, Jan 14 was down GBP0.10/tonne at GBP164.90/tonne. Nov 13 Paris milling wheat settled EUR0.50/tonne weaker to close at EUR204.00/tonne.

Feb 14 Paris rapeseed fell EUR1.00/tonne to EUR377.50/tonne, whilst Jan 14 Paris corn closed EUR1.25/tonne lower at EUR172.75/tonne.

Wheat prices are stuck in a narrow sideways range. Nov 13 London wheat now hasn't closed outside of GBP163-166/tonne in 21 sessions, whilst front month Paris wheat has been stuck in the EUR201-208/tonne range during this time.

The strong pace of EU exports provides underlying support to the market, although the continued downwards trajectory of US corn futures remains a bearish influence. European wheat had a clean sweep in last week's Egyptian tender, albeit thanks to cheaper US wheat being at a freight disadvantage. EU soft wheat exports are more than 50% up on year ago levels at 10 MMT already this season, and showing little sign of letting up thus far.

It will be interesting therefore to see what happens with India's tender offering of up to 340 TMT of wheat, which has a closing date of today. It would seem that they picked up some decent interest, with bid prices said to be as high as USD286.20/tonne FOB, which is better than the average price of USD284.60/tonne FOB that the Egyptians paid on Thursday (although one cheeky monkey also threw in a bid at the Indian government's stated minimum price of USD260/tonne presumably just for the hell of it).

Even at the best bid of USD286.20/tonne, that would still put Indian wheat in excess of USD300/tonne into Eastern Asia including freight costs, where buyers can currently pick up US corn for around USD50/tonne less than that. One South Korean buyer reported bought 113 TMT of optional origin, but thought to be Black Sea, corn today at USD240.80 C&F for April shipment.

Russia said that it had exported 1.11 MMT of grains in the Nov 1-13 period, including 806 TMT of wheat, 188 TMT of corn and 98 TMT of barley. That takes their 2013/14 marketing year to date exports to 12.49 MMT, a rise of 13.3% on last year. They shipped 15.7 MMT of grains in the full season 2012/13.

The Russian grain harvest now stands at 93.3 MMT off 93.9% of the planned area. That includes 53.9 MMT of wheat, off 97.8% of plan, along with 8.6 MMT of corn, off 67% of plan. They've also cut 95.2% of this year's barley crop, producing 16.3 MMT to date (all figures are before cleaning and screening). Winter plantings for 2014 appear to have stalled at around 14.4 million hectares, some 2 million less than was originally anticipated. Most of that is now likely to go into corn in the spring.

Lebanon tendered for 20 TMT of wheat for December shipment, a few days after having bought a similar volume from Romania.

Oil World forecast the global rapeseed at a record 67.7 MMT versus a previous estimate of 67.5 MMT, and up 6% compared to 63.9 MMT last year.

The French corn harvest is only making very slow progress, and wheat planting also seems to have ground to a virtual halt (up only 3 points in the week to Nov 11 at 84%) after making great early strides. Winter wheat and barley crop conditions also fell last week, although they are still significantly better than a year ago. Even so these latest developments will want monitoring in the coming weeks.