EU Wheat Recovers From Morning Consolidation To Trade Higher

Posted by Nogger - a legend in his own mind at 16:41 | Categorized as

05/02/14 -- Heading towards the close of trading, EU wheat futures had recovered from a morning bout of lower consolidation following yesterday's gains and were back into positive territory.

May 14 London wheat traded GBP0.75/tonne higher at GBP156.00/tonne, whilst new crop Nov 14 was also GBP0.75/tonne firmer at GBP146.00/tonne.

Paris traded with Mar 14 wheat up EUR0.75/tonne at EUR195.00/tonne, with Mar 14 Paris corn unchanged EUR174.00/tonne and May 14 Paris rapeseed EUR0.75/tonne higher at EUR372.25/tonne.

The market remains concerned about the steep drop in wheat crop condition ratings in some of the leading producing states in the US, and there is also some heightened talk of winterkill issues in Ukraine.

"The cold wave recorded last week in Ukraine has certainly damaged winter crops," said Agritel.

Air temperatures (in Ukraine) fell to minus 20 C last week, leading a drop in soil temperatures to nearly minus 17 degrees, "which is a critical temperature for wheat", they said according to Agrimoney.com.

Any wheat considered not viable can of course be replanted in the spring, although it's more likely to be with corn or barley, or even oilseeds, rather than spring wheat.

Not everybody agrees. The Ukraine Ministry yesterday said that winter crops were 92% good/satisfactory, and the USDA's office in Ukraine also played down damage potential.

In Russia, the Ag Ministry there said that 65% of winter crops were in "good" condition, with a further 31% "satisfactory" and only 4% in a "poor" state.

Russia picked up less than 10 TMT in their second round of intervention purchases of the week today, taking the total volume bought so far to just under 600 TMT - a far cry from their original intentions. This isn't necessarily bullish news, as it may suggest that growers feel that the export market offers them potentially more lucrative returns.

Informa yesterday estimated the 2014/15 global wheat crop at 707.8 MMT, down slightly from a previous estimate of 708.2 MMT and a little below the 2013/14 crop of 713.3 MMT.