EU Grains Mostly Lower, Despite Forecasts For Strong Exports
12/02/15 -- EU grains were mostly lower, with Mar 15 London wheat down GBP0.20/tonne at GBP121.65/tonne, Mar 15 Paris wheat was down EUR1.25/tonne at EUR184.50/tonne, Mar 15 Paris corn fell EUR1.00/tonne to EUR152.25/tonne and May 15 Paris rapeseed was EUR0.25/tonne lower at EUR356.50/tonne.
Yesterday's news that the UK exported 225 TMT of wheat in December - a near 3 year high and three times the volume shipped out in December 2013 - was welcome. Whilst that take the marketing year-to-date total to almost 1 MMT, that's still less than a third of our exportable surplus, even if it is more than four times the volume shipped out a year ago.
It was also interesting to see that around 30% of these exports went to non-EU homes, the largest volume for this period since 1996/97, according to the HGCA.
Whilst the pound itself is not particularly strong, it's not as weak as the euro, against which it hit a new 7-year high of over 1.35 today. That is obviously limiting opportunities to export UK wheat to Europe.
UK wheat has though managed to make inroads into some unusual and exotic destinations this season, such as Thailand, Japan and the US. Barley exports have also been doing well, with GrainCo in Newcastle currently loading a 60,000-tonner, the MV Rosco Poplar, at Tyne Dock destined for Saudi Arabia.
The fall in crude oil prices and the corresponding slump in global freight rates is clearly helping UK and EU grain get to some of these far-flung destinations.
The weak euro is certainly helping exports from the continent this season, with wheat shipments at an all time high last week.
Strategie Grains today estimated the EU’s 2014/15 soft wheat exports at a record 32.5 MMT, up 3.2 MMT from their previous estimate. Exports next season were forecast at 29.0 MMT, up 2.0 MMT from their previous estimate.
The French analysts also increased their forecast for EU barley exports in 2014/15 by 400 TMT from a month ago to 7.9 MMT. That's a near 39% increase on last season. They said that China will take 1.62 MMT of EU barley this season.
In 2015/16 they forecast EU barley exports even higher, at 8.1 MMT, of which China will import 2 MMT. French traders said that China has already bought around 400-600 TMT of French barley for next season.
In other news, MDA CropCast increased their forecast for the Ukraine corn crop by 1.2 MMT to 28.5 MMT.
Morocco seeks 360,000 MT of EU soft wheat and 45,000 MT of EU durum wheat for May shipment. Jordan has re-tendered for 100,000 MT of feed barley of optional origin for Aug-Sept shipment.
The agreed ceasefire in Ukraine was given some credit for a weaker US dollar and a rise in crude oil values today, even though previous such deals have failed to be observed for very long.
