EU Wheat Flat As Corn Pours In Through The Out Door
24/01/14 -- EU grains closed with little change on the day, and aside from Monday's losses, not that much changed on the week.
New front month Mar 14 London wheat ended GBP0.05/tonne lower at GBP151.95/tonne, and new crop Nov 14 closed GBP0.20/tonne higher at GBP143.95/tonne. Mar 14 Paris wheat finished down EUR1.00/tonne to EUR192.75/tonne, Mar 14 Paris corn also slipped a euro to EUR172.75/tonne, whilst Feb 14 Paris rapeseed fell EUR0.50/tonne to EUR358.00/tonne.
For the week, Mar 14 London wheat was GBP2.15/tonne lower, with Nov 14 down GBP0.80/tonne. Mar 14 Paris wheat was EUR1.00/tonne higher on the week, with Mar 14 corn up EUR0.25/tonne and Feb 14 rapeseed EUR2.50/tonne weaker.
International demand for wheat is good, with low world prices attracting volume buying interest from the likes of Egypt, Iraq, Algeria, Saudi Arabia and China this past week. Competition for those orders is also strong however.
As well as the US, there's Canada and Australia for EU wheat to contend with. Meanwhile Russia and Ukraine seem to keep squeezing the odd extra cargo out every now and again.
On top of that of course there's also India, who are tendering to sell another 120 TMT of wheat again this week. They re-iterated their claim that they could harvest a record 100 MMT of wheat this year, which could keep them in the international export market throughout 2014/15.
Whilst EU exports remain strong in the face of all this competition, with Brussels granting 819 TMT of soft wheat export licences this week, don't forget that there's also lots of cheap foreign corn coming in through the out door, and in close to identical volumes.
The last four week's worth of EU soft wheat export licences have totalled 2.63 MMT versus 2.35 MMT of corn imports being authorised.
Including durum and wheat flour exports, the EU has so far granted export licences for a total volume of 17.5 MMT of "all wheat" this season, that's 67.4% of the USDA's forecast for 2013/14. At the same time import licences for 74.4% of the USDA's estimate for EU 2013/14 corn imports have also been issued.
In other news, SovEcon said that Russia had exported 2.4 MMT of grains in December, mainly 1.5 MMT of wheat and 700 TMT of corn - the latter included a first ever shipment of Russian corn to Japan. January exports will fall to around 1.0-1.3 MMT of grains, including 500-600 TMT of wheat, they estimate.
Excessive wetness remains an issue on parts of the UK, northern and south eastern France and Spain, and parts of Italy.
Things are looking up in Ukraine and Russia though after an unseasonably warm and dry December. "Strong waves of rain and snow showers have ended a long drought in Ukraine and southern Russia, thereby improving the outlook for winter wheat. At least one inch of moisture, but up to 2 inches, has developed in Odessa, a key wheat area in southern Ukraine. Krasnodar and Stravropol, top winter wheat districts in southern Russia, have received almost a month’s worth of precipitation from recurring showers the past 10-14 days," said Martell Crop Projections.
