EU Grains End Little |Changed, Does Brexit Vote Hold The Key For London Wheat?
29/02/16 -- There wasn't a great deal of change to EU grains prices to set the ball rolling for the week.
At the finish, Mar 16 London wheat was up GBP0.20/tonne at GBP101.70/tonne, Mar 16 Paris wheat was EUR1.75/tonne firmer at EUR147.25/tonne, Mar 16 corn rose EUR0.50/tonne to EUR146.75/tonne and May 16 rapeseed was down EUR0.25/tonne to EUR349.75/tonne.
Saudi Arabia were reported to have bought 880,000 MT of wheat over the weekend in their tender for 770,000 MT. The prices paid were said to be between $186.18-191.38/tonne C&F for Apr/Jun shipment.
UniCredit said that the pound could rise to $1.60 by the end of 2016, as it is currently undervalued and exposed to a "blistering recovery" should the UK vote to stay in the EU this June.
That could put new crop London wheat under pressure, especially given the current large premium that it commands over old crop, if they are correct.
EU grains are largely in good condition due to the relatively mild winter thus far, report Reuters.
French analysts Arvalis reported that winter wheat crops there are 1-2 weeks ahead of normal advancement. FranceAgriMer reported crop conditions at 94% good to very good as of last week.
In Germany, winter wheat mostly escaped frost damage in late December/January apart from a few areas bordering the Polish border. Given that we are now at the end of February, and that March is normally a much warmer month in Germany, traders there are optimistic that they've now escaped the worst of any winter threat.
In the UK, things generally look pretty good also.
Poland potentially has one or two problem areas from winter-kill, as mentioned. However these are largely confined to the northern/central regions, with no more than 10% of the crop likely to be affected, according to Sparks Polska.
All in all then, as things stand, Europe should be in line to produce a similar crop to that of 2015, given normal/reasonably favourable weather conditions between now and harvest time. Even if not, carryover stocks from 2015 will be unusually large.
Russian seaports exported 623.4 TMT of grain last week, up from 509.1 TMT the previous week. Wheat accounted for 68%, or 423.3 TMT, of that total, corn 112.8 TMT and barley 68.8 TMT.
Total Russian season to date exports have now overtaken last year at 24.65 MMT (up 1.9%). That includes 18.37 MMT of wheat, 3.49 MMT of barley and 2.59 MMT of corn.
Much warmer than normal weather in the south of Russia means that spring plantings have got off to an unusually speedy start, with sowings said to be around 18 days ahead in the Stavropol region for example. That should extend the growing season and little and help maximise yields.
Ukraine's seaports only exported 353.8 TMT of grain last week, down from 484 TMT the previous week, with wheat shipments slowing to just 10.6 TMT. Corn was responsible for the rest (343.2 TMT). Early spring grain plantings here are also now taking place somewhat earlier than normal.
