EU Wheat Declines Despite Brisk Export Pace

Posted by Nogger - a legend in his own mind at 09:02 | Categorized as

16/01/14 -- EU grains closed mostly weaker in follow through trade after a sharp slump in values across the Atlantic on Wednesday night.

Jan 14 London wheat ended GBP0.45/tonne lower at GBP154.30/tonne, and Nov 14 fell GBP0.60/tonne to GBP146.50/tonne. Mar 14 Paris wheat finished down EUR0.50/tonne to EUR192.50/tonne, Mar 14 Paris corn rose EUR0.25/tonne to EUR172.75/tonne, whilst Feb 14 Paris rapeseed fell EUR2.75/tonne to EUR360.25/tonne.

Strategie Grains trimmed slightly their forecast for the 2014 EU-28 wheat crop from 138.0 MMT to 137.7 MMT, although that's still 2% more than in 2013.

"This reduction mainly corresponds to the UK and stems from a combination of lower planted area and lower trend yield," they said.

The UK crop was estimated at 15.27 MMT, which is 160 TMT down on their previous forecasts but still more than 28% above last year's second disaster in a row.

The French analysts raised their 2014 EU-28 barley production forecast by the same 300 TMT that their wheat estimate was reduced, from 54.5 MMT to 54.8 MMT - although that's still an 8% reduction on last year. They also tweaked slightly higher their 2014 EU-28 corn crop estimate from 64.7 MMT to 64.8 MMT, a marginal increase on production of 64.5 MMT in 2013.

Egypt bought one cargo each of Ukraine, Russian and US SRW wheat, along with two cargoes of French wheat all for Feb 15-28 shipment and all at prices around $301-302/tonne including freight. The cheapest French offers were around $279 FOB, which is some $6 lower than the bids that missed out in GASC's last tender at the weekend.

Brussels announced another bumper week of exports, with soft wheat licences for 810 TMT being granted. That takes the cumulative 2013/14 season to date total now up to 15.9 MMT, up 53% on 10.4 MMT this time a year ago. Whilst it's another impressive weekly total, note that they also issued import licences for 646 TMT of corn too.

Tunisia are tendering for 117,000 MT of soft milling wheat, 109,000 MT of durum wheat and 75,000 MT of feed barley - all of optional origin for Feb-March shipment. France would usually be the favourite supplier for this destination.

On the EU weather front, MDA CropCast said that "snow cover has increased a bit in Poland and Scandinavia, but remains limited elsewhere. Persistent rains across the UK are maintaining some wetness there, whilst rains in Germany and northern Italy have improved moisture. Dryness continues in east central and southeastern areas though."

"A late winter, or virtually no winter at all, is rarely a good thing for yields," one market commentator observed.