EU Wheat Rises On Bumper Weekly Exports

12/03/15 -- EU grains closed mixed, with wheat a little higher and corn and OSR lower.

At the finish, Mar 15 London wheat was up GBP0.85/tonne at GBP118.75/tonne; May 15 Paris wheat was EUR2.00/tonne higher at EUR190.00/tonne; Jun 15 Paris corn was EUR0.25/tonne lower at EUR165.00/tonne; May 15 Paris rapeseed was EUR2.75/tonne higher at EUR368.25/tonne.

This was the first front month close on Paris wheat in the EUR190's since late January.

Sudden strength in Chicago wheat, which was up for a fifth straight session today, was supportive. Even more so was the announcement that Brussels had granted a hefty 1.59 MMT of soft wheat export licences this past week, the second highest volume on record.

That was an impressive total, and confirms just how competitive EU wheat is on the international export stage given the acute weakness of the euro. Note that the all time high weekly volume of soft wheat export licences (1.67 MMT) was set only a few weeks ago at the beginning of February.

Still, as the season gets closer to winding down, the picture being painted is one of more than ample old crop stocks despite these large foreign sales, and there's the prospect for these to grow again in 2015/16, even if EU production is expected a little lower.

Strategie Grains today reduced their forecast for EU-28 soft wheat exports this season by 2.5 MMT to 30.0 MMT, although that is still a rise on last year's record 29.3 MMT.

They see exports in 2015/16 declining a little to 29 MMT, and ending stocks next season rising to 20 MMT, which is above even the 10-year high 19.5 MMT forecast by the EU Commission earlier in the week.

"The situation is therefore getting heavy again, notably for the main exporting countries (Germany and France) but also in the UK," Strategie Grains said.

FranceAgriMer raised their forecast for French wheat exports from 17.8 MMT to 18.0 MMT, although that's still down 6.25% on 19.2 MMT a year ago. They see corn exports at 6.9 MMT versus 6.7 MMT previously and 5.3 MMT a year ago. Barley exports were revised up to 6.0 MMT from 5.8 MMT in February and 5.1 MMT in 2013/14.

The French analysts also forecast 2015/16 wheat plantings (excluding durum) at 5.14 million ha, a 2.7% rise on a year ago. They see barley plantings (both spring and winter) at 1.27 million ha, up 3.1% compared to a year ago. The French winter and spring OSR area will decline 1.4% to 1.48 million ha, they added.

Ukraine estimated that 83% of their winter crops were in good to satisfactory condition, and 17% weak/thinned. That's a one point improvement on previously. They said that fertiliser had so far been applied on 52% of winter grains and 62% of winter OSR.

The Ukraine Ag Ministry said that grain exports so far this season totalled 25.39 MMT, including 9.41 MMT of wheat, 3.87 MMT of barley and 11.85 MMT of corn.

Tunisia are in the market for 126,000 MT of optional origin milling wheat and 75,000 MT of optional origin feed barley. Egypt said that they intend to buy 3.5 MMT of wheat for state-owned stocks on the domestic market this year. Bangladesh bought 100,000 MT of imported wheat from Glencore and 150,000 MT of Ukraine wheat, the latter being part of an inter-governmental deal.

The USDA's FAS said that Saudi Arabia will import a record 3.8 MMT of wheat in 2015/16, up 8% on this season. Corn imports will climb 29% to 4.5 MMT, although barley imports will fall 30% to 6.8 MMT, they added.