Nogger's Blog

06/12/13 -- EU grains closed mostly a little lower in generally range bound trade. The strong pace of EU wheat exports continue to provide underlying support, but the global crop keeps getting bigger.

Jan 14 London wheat ended up GBP0.45/tonne at GBP164.70/tonne, although other old crop months were lower. Jan 14 Paris wheat finished EUR1.75/tonne weaker at EUR210.00/tonne, Jan 14 Paris corn closed EUR0.25/tonne lower at EUR180.25/tonne, whilst Feb 14 Paris rapeseed fell EUR3.00/tonne to EUR374.50/tonne.

For the week that puts Jan 14 London wheat the princely sum of GBP0.20/tonne higher. Paris wheat gained EUR0.25/tonne, corn added EUR2.50/tonne and rapeseed fell EUR3.50/tonne.

Generally sideways trade remains the order of the day. London wheat now hasn't closed outside the EUR163-166/tonne range for 36 trading sessions.

Brussels confirmed that they'd issued 572 TMT of soft wheat export licences this past week, bringing the 2013/14 cumulative total to 11.8 MMT, up 47.5% versus this time a year ago. Corn imports in the same period meanwhile are down nearly 16% at 3.2 MMT.

Algeria bought 300 TMT of optional origin, most likely French, milling wheat at around USD311-314/tonne C&F for Jan shipment. Tunisia bought 100 TMT of wheat and 75 TMT of barley for Jan/Feb shipment, whilst Morocco is said to have bought around 500 TMT of wheat in the past 3 weeks (probably mostly French) after import duties on wheat were temporarily suspended.

Libya has bought 35 TMT of Mexican durum wheat this week, and Iran is said to have bought at least 300 TMT of mixed origin (probably some German) wheat in the past 3 weeks after Western sanctions were lifted. They are also said to be in the market for Australian wheat and Mexican durum too.

The French corn harvest advanced from 73% to 85% done in the week through to Dec 2, according to FranceAgriMer. That's still well behind last year when 99% of the crop was in.

French winter wheat is 95% sown, versus 91% a week ago and 97% this time last year. Maturity is advanced, with 39% of the crop in the early tillering stage versus 32% a week ago and only 17% this time last year. Winter barley is 61% at the tillering stage versus 55% last week and 34% a year ago.

FranceAgriMer rated 79% of winter wheat as being in good/very good condition, a 2 point drop on a week ago, but well ahead of 63% this time in 2012. Winter barley good/very good was unchanged on last week at 81%, and versus 84% this time last year.

Strong demand from North Africa and the Middle East would appear to offer some modest upside potential for EU milling wheat across the winter months, especially with now only very limited availability of quality wheat out of the Black Sea. Competition from the US, Canada and Australia is seen limiting gains though. India are also likely to remain something of an wheat exporting wild card in Q1 of 2014, by the end of which they should have begun harvesting another bumper, and possibly record, crop of their own - the first major wheat harvest of the year in the northern hemisphere.