London Wheat Slips To More Than 3-Month Low

Posted by Nogger - a legend in his own mind at 08:25 | Categorized as

23/02/15 -- EU grains closed mostly lower on the day. The weak euro, against which the pound rose above 1.36 today, remains a problem for London wheat relative to the French market.

At the close, Mar 15 London wheat was GBP2.00/tonne easier at GBP118.50/tonne, Mar 15 Paris wheat was EUR1.00/tonne lower at EUR184.75/tonne, Mar 15 Paris corn was down EUR1.75/tonne at EUR149.50/tonne and May 15 Paris rapeseed fell EUR1.50/tonne to EUR356.50/tonne.

For London wheat this was the fist sub-GBP120/tonne close for a front month since Nov 11. It was also the first time we've seen Paris corn close below EUR150/tonne since Nov 19.

The EU Commission's MARS unit released their latest crop report today, in which they said "for the EU, our frost-kill model to date suggests only local and limited frost-kill crop damages in Bulgaria, Romania, Hungary and Poland."

"However, the north-eastern regions of Ukraine, and especially southern Russia, appear to be considerably affected by frost kill. These regions were affected by severe frosts until mid-January, when the snow cover was inadequate to protect the crops, which were vulnerable due to their weak establishment as a consequence of insufficient rains and dry soil conditions during the start of the winter cropping season," they noted.

The Russian Ag Ministry said last week that winter grain production there could fall by around 40% in 2015/16 you may recall. The market however seems to be more preoccupied with other matters for the time being.

Closer to home, crop conditions appear better than they were 12 months ago in France. FranceAgriMer said on Friday that 91% of their winter wheat crop was rated good to very good, up from 74% this time last year. The French winter barley crop was also rated 91% good to very good compared to 73% a year ago. They estimated spring barley planting at 9% complete, which is 7 points ahead of this time in 2014.

They also said that 95% of the French winter wheat crop is at the tillering stage versus 89% a year ago, whilst 98% of the winter barley crop is tillering, the same as this time last year.

Ukraine seaports exported 857.6 TMT of grains last week, according to APK Inform. That's up sharply from the 574.8 TMT exported the previous week. Wheat accounted for 18% (158.1 TMT) of last week's total and corn 74% (634.5 TMT). Corn's share of the export market the previous week was 80%. They also exported 65 TMT of barley last week.

Ukraine's total grain exports to date this season now stand at 23.7 MMT, according to the Ag Ministry. That total includes more than 9 MMT of wheat, 3.8 MMT of barley and 10.6 MMT of corn.

Russia's exports via seaports meanwhile fell to 236.2 TMT last week from 401.6 TMT the previous week. Wheat accounted for 37.5% (89 TMT) of that total, barley 42% (99.4 TMT) and corn 18% (43.3 TMT).

There's some trade chatter that Russia may be considering extending the recently introduced duty on wheat exports to also include corn and barley.