EU Wheat Falls As Chicago Market Slips To 19-Month Low

02/01/14 -- EU grains closed mostly lower to start the year in relatively thin trade with many participants absent, or sitting on their hands, until next week. Amongst other things, that brings the January world supply and demand numbers from the USDA, along with stocks and wheat plantings data.

Jan 14 London wheat closed GBP0.50/tonne lower at GBP163.25/tonne, Jan 14 Paris wheat finished EUR1.00/tonne easier at EUR208.00/tonne, Jan 14 Paris corn closed EUR1.75/tonne higher at EUR173.50/tonne, whilst Feb 14 Paris rapeseed dropped EUR1.25/tonne to EUR365.25/tonne.

Fresh news was relatively light, although two Indian firms offered 220 TMT of wheat for international tender for Feb 1 - Mar 5 shipment as part of the government's effort to clear 2 MMT prior to new crop coming in at the end of March. Plantings there might reach an all time high 30 million hectares this year some suggest. That could see production at a record 95 MMT.

Algeria tendered for optional origin wheat for March shipment, and Egypt's GASC were also said to be back in the market tendering for wheat for Jan 21-31 and Feb 1-10 shipment.

The results of the Egyptian tender are likely to be released tomorrow afternoon and will provide a useful barometer as to whether there are still any cheap parcels of Romanian or Russian wheat left.

It will also be interesting to see if French wheat is still pricing itself out, as it was in the last GASC tender, and if US wheat is now cheap enough to overcome it's freight disadvantage.

Unconfirmed reports that US corn originally destined for China has been resold to Spain and Portugal would be bearish for demand for feed wheat in Europe if they prove to be true.

The ongoing dispute between the US and China over non-approved GMO corn in some shipments to the Far Eastern country shows little sign of being resolved any time soon.

US wheat futures traded sharply lower in afternoon trade, dragging EU wheat down with them. CBOT wheat ultimately closed below USD6.00/bu for the first time for a front month since May 2012.