EU Wheat Closes At Best Levels In A Month On FSU And US Dryness

Posted by Nogger - a legend in his own mind at 07:48 | Categorized as

23/09/15 -- EU grains closed generally higher,and with wheat leading the way on continued talk of dryness remaining an issue for winter wheat crops in southern Russia, Ukraine and also the US.

At the close, Nov 15 London wheat was up GBP3.85/tonne to GBP115.25/tonne. In Paris, Dec 15 wheat rose EUR3.25/tonne to EUR174.75/tonne, Nov 15 corn finished EUR1.25/tonne higher at EUR16250/tonne and Nov 15 rapeseed ended EUR1.50/tonne firmer at EUR365.00/tonne.

For both London and Paris wheat this was the highest close in over a month.

Whilst Russian winter grains plantings are now past halfway, much of what has been sown has gone into some pretty dry soil, and that dryness is forecast to continue for at least the next 15 days.

It's a similar situation in Ukraine, except that winter plantings there are only around a quarter of the way through, as growers wait for rain.

Crops in both countries need rain soon to get themselves established ahead of the onset of the harsh FSU winter.

Russian customs data shows that the country exported 938 TMT of grains in the week Sep 15-21, although with analysts lining up to estimate total exports this month at a record 4.5-4.7 MMT even those isn't quite enough to reach that target.

That takes Jan 1 - Sep 21 Russian grain exports to almost 22.5 MMT, including 13.2 MMT of wheat.

The market is still waiting on Russia to make a move on it's wheat export duty, with the Russian Economy Ministry reportedly opposing a cut in the tax. No reduction would probably continue to hold back Russian exports a little.

Things are also dry in the Great Plains, the US breadbasket, where winter wheat is due to be planted in October. "Rainfall has been sparse especially on the High Plains – eastern Colorado, western Nebraska, west Kansas and the Texas panhandle," say Martell Crop Projections.

"Kansas is the top bread wheat state and the largest US wheat state overall, including spring wheat. Conditions are currently are very dry in the western third of the state. Hot September temperatures have contributed to dry field conditions, increasing the rate of evaporation," they add.

In other news, Jordan are tendering for at least 50,000 MT of hard wheat of optional origin.