EU Grains Mostly Higher On The Day But Lower For The Week

Posted by Nogger - a legend in his own mind at 12:35 | Categorized as

08/01/16 -- EU grains finished mostly higher on the day, but lower for the week.

At the close of trading, Jan 16 London wheat was up GBP1.20/tonne at GBP111.00/tonne. In Paris, Mar 16 wheat rose EUR2.00/tonne at EUR171.50/tonne, Mar 16 corn was EUR2.50/tonne higher to EUR160.75/tonne and Feb 16 rapeseed fell EUR2.00/tonne to EUR366.75/tonne.

For the week, that puts nearby London wheat GBP3.00/tonne lower (-2.6%), with French wheat EUR2.00/tonne lower (-1.2%), corn down EUR4.00/tonne (-2.5%) and rapeseed down EUR7.25/tonne (-1.9%).

In London wheat, the Jan/Nov 16 spread widened from GBP12.15/tonne a week ago an impressively large GBP13.75/tonne tonight. The premium on offer tonight for Nov 17 versus nearby Jan 16 is GBP19.80/tonne compared to GBP18.20/tonne a week ago.

The notion that the outlook for the GBP/EUR isn't quite as rosy as many were prediction a month or two back appears to be confirming, with sterling closing the week at just under 1.33 against the single currency - the lowest in 11 months.

Will this mean that we will finally start to see UK wheat exports pick up a little relative to those from the continent?

Brussels only released 369 TMT worth of EU soft wheat export licences this past week, That takes the total volume granted so far this season to 12.8 MMT, down 13.5% on this time last year.

Barley exports look like they are stagnating after a very impressive start to the campaign, led by fresh new business from China. Barley export licences this week only totalled 58 TMT, although cumulative licences for the season to date are still up more than 30% on last year at 5.6 MMT.

Corn keeps flooding in, with import licences for that almost matching the export total for soft wheat at 367 TMT. Season to date corn imports are now 6.9 MMT, up more than 68% compared to only 4.1 MMT this time a year ago.

A busy week lies ahead, with the USDA due out on Tuesday with their latest global supply and demand report, as well as US quarterly grain stocks and estimates on US winter wheat seedings for the 2016 harvest.

Concerns about the size of this year's Indian wheat crop keep getting a quiet mention following adverse weather conditions through planting.

"The concern is the 89 MMT crop estimated by the USDA in December is going to shrink enough to require imports of 2-6 MMT. Due to the phytosanitary standards put forward by India the only country that can send wheat their way is Australia but not with ability to satisfy a 6 MMT call," noted FCStone.

Brazil's CONAB also give us their latest estimates on crop production there this year on Tuesday. It will be interesting to see if the are tempted to revise down somewhat their ideas on corn and soybeans.