EU Grains End Day Higher, Exports On Pace To Set New Records
13/02/15 -- EU grains closed mostly higher on the day, but mainly lower for the week.
At the close, Mar 15 London wheat was GBP1.10/tonne higher at GBP122.75/tonne, Mar 15 Paris wheat was EUR2.50/tonne firmer at EUR187.00/tonne, Mar 15 Paris corn was up EUR0.75/tonne at EUR153.00/tonne and May 15 Paris rapeseed rose EUR0.75/tonne to EUR357.25/tonne.
For the week that puts London wheat down a pound, with Paris wheat EUR1.25/tonne lower, corn down EUR2.75/tonne and rapeseed half a euro higher.
The euro closed at its lowest level against the pound in 7 years tonight, which continues to help grain on the continent find export homes. Slumping global freight rates are an added bonus, enabling EU grains to find their way to non-traditional far away homes.
There's talk of French feed wheat attracting buying interest from the likes of the Philippines, Thailand and South Korea.
Strategie Grains, the USDA and EU Commission have all increased their forecasts for EU wheat exports in the last week, with two of those three now estimating these at record levels, higher even than last year's all time highs. Production this season though was also a record.
Brussels announced that it had granted 626,000 MT of soft wheat export licences this past week, taking the season to date total to 19 MMT, which is half a million up on the record pace set this time last year.
EU barley exports are now running at 4.9 MMT so far this season, and will total a record 7.9 MMT by the end of it, according to Strategie Grains. That would easily beat the previous all time high for EU barley exports of 6.5 MMT set in 2012/13 (using the USDA's numbers).
This abundance of wheat and barley, means that EU corn imports so far this season only total 5.63 MMT, down almost 28% from 7.79 MMT this time a year ago.
The UK is also managing to pick up some business to unusual locations. The first ever large feed barley vessel sailed from Portbury to Japan last week, and a 60,000 MT vessel is currently loading at Tyne Dock destined for Saudi Arabia.
December wheat exports from the UK were also confirmed at a 3-year high this week, although of course that compares to two very low volume export years in 2012/13 and 2013/14. The UK is still faced with the prospect of a large wheat carryover to take into 2015/16.
There's a GBP5.60/tonne premium on offer for Nov 15 over May 15 London wheat, to tempt UK growers into doing just that (and interestingly a further similar amount on offer to carry your 2014 wheat all the way to May 16). How many have the room in the barn and don't need the money for cashflow purposes though is an entirely different matter.
