EU Grains Mixed - French Problems Persist
28/07/14 -- EU grains closed mixed with Nov 14 London GBP0.80/tonne lower at GBP125.50/tonne, Nov 14 Paris wheat was down EUR1.50/tonne to EUR178.25/tonn, Aug 14 Paris corn was up EUR3.50/tonne at EUR159.75/tonne and Aug 14 Paris rapeseed rose EUR2.25/tonne to EUR320.00/tonne.
Trading was subdued, with many buyers absent for the Eid al-Fitr holiday, an Islamic celebration that marks the end of the month-long Ramadan
There's still widespread trade talk of hagberg problems with the French crop.
Traditional export homes for French wheat like Algeria, Morocco and Egypt all carry minimum requirements for hagbergs of at least 200 if not higher, which potentially gives French traders a large headache this year. It could also provides UK milling wheat with a nice little window of opportunity.
For UK feed wheat it's a different story, with French origin grain seen undercutting the market in anticipation of a glut coming onto the market. French feed wheat apparently traded into Ireland last week at EUR10/tonne under offers from the UK, according to Agrimoney.
UK milling wheat will have still have to compete with the Black Sea for export business too, and Russia's crop at least seems to be getting larger. IKAR today raised their estimate for the wheat crop there to 57.5 MMT versus a previous forecast of 56.3 MMT. That's considerably higher than the USDA's current 53 MMT forecast and 5.5 MMT more than last year's production.
Russia's Ag Ministry said that as of July 25th Russia had harvested 33.2 MMT of wheat (of 36% of the total planned area) with an average yield of 3.66 MT/ha, up more than 20% on a year ago. They are also said to have exported 1.6 MMT of wheat already this month.
In excess of 80% of the Russian wheat harvest is currently said to be of milling standard.
Russian 12.5% milling wheat FOB the Black Sea is currently offered in the market around $240-242/tonne FOB, which is the equivalent of around GBP142/tonne.
