London Wheat Slides Again, Old Crop/New Crop Spread Widens Further
21/04/15 -- EU grains closed mixed, but generally more in the red than in the green. London wheat was lower across the board, with old crop taking the biggest hit, widening the gap between May 15 and Nov 15 to GBP11.50/tonne.
The day ended with May 15 London wheat down GBP1.70/tonne at GBP112.85/tonne, May 15 Paris wheat closed unchanged at EUR182.75/tonne, Jun 15 Paris corn was EUR0.75/tonne lower at EUR161.75/tonne and May 15 Paris rapeseed was flat at EUR375.75/tonne.
Front month London wheat has now only managed to post a net daily gain twice since Easter. Large volumes of old crop in store are weighing on the nearby months. The forwards are now getting dragged down into the mire as the arrival of new crop draws ever closer, even if the premium to be had for that position is historically high. Nevertheless, Nov 15 London wheat is still down around GBP10/tonne in the past month.
A Bloomberg survey estimated the EU-28 soft wheat crop at 140.1 MMT, down 6.2% from a year ago. All wheat production was pegged at an average guess of 147.7 MMT, a 6% decline on last year's all time high, although still the third highest on record.
The French all wheat crop was estimated at 39.8 MMT, up 2% on a year ago, from within a range of trade guesses that were 39.1-41.0 MMT.
The German crop was estimated at an average 25.8 MMT, down 7.2% versus last year. The range of guesses for that were 25.3-26.7 MMT.
Russian spring grains are now said to have been planted on 2.6 million ha, or 8.5% of the official Ministry forecast. That's a little bit behind last year's pace when 2.9 million ha had been sown, with cold weather said to be hampering early progress. They said that only 58% of winter grains had had a fertiliser application so far this spring.
IKAR forecast the 2015 Russian wheat crop at 54-59 MMT, up from a previous estimate of 52-57 MMT. They said that Russian 12.5% milling wheat was now offered at $193/tonne FOB the Black Sea, that's down $14/tonne in a week, as farmers there are pressed into selling to finance their spring plantings. They are now faced with the stark task of having to absorb the hefty Russian export duty themselves in order to make their wheat competitive on the international market.
In Ukraine, early spring grains have been planted on more than 2 million ha, or 88% of the Ministry forecast. That includes 1.52 million ha of spring barley and a small area (134k ha) of spring wheat.
Corn planting in Ukraine is also now underway, with 215k ha, or 5% of the Ministry forecast, now sown. Farmers there have also so far sown 661k ha of sunflowers, or 15% of the Ministry target.
The Ukraine Ministry say that 90% of winter grains have so far had a spring fertiliser application.
They went on to forecast 2014/15 grain exports at a record 36.8 MMT, up 1 MMT from their previous estimate. That includes 11.7 MMT of wheat, 4.3 MMT of barley and 20.1 MMT of corn. Exports so far this season are at 27.7 MMT, so if the forecast proves to be correct then there's still a further 10 MMT or so of Ukraine grain left to come onto the international market.
In other news, Spanish customs data shows that the country imported 219.4 TMT of wheat in February, a 4.4% increase on the same month in 2014, along with 552.6 TMT of corn, a 35.2% increase.
The main provider of the wheat was France at 108.9 TMT, followed by Russia (26.5 TMT) and Ukraine (26.7 TMT). The latter country was the top seller of the corn shipped into Spain, accounting for almost half with 262.1 MMT. France was second at 122.1 TMT.
