London Wheat Gets Benefit Of Ailing Sterling
15/08/16 -- EU grains began the week mixed, with benchmark Nov 16 London wheat trading close to the best levels on a front month since Jan 2015.
At the close Nov 16 London wheat was up GBP0.15/tonne at GBP130.90/tonne, Sep 16 Paris wheat was down EUR2.00/tonne to EUR162.50/tonne, Aug Paris corn was up EUR0.75/tonne at EUR166.50/tonne, Nov 16 Paris rapeseed shot EUR6.25/tonne higher to EUR375.75/tonne.
UK wheat continues to get the benefit of the falling pound, which slumped below 1.15 against the euro today, en route to 1.11 according to Morgan Stanley.
The demise of the French wheat crop, and at least some trouble for that in Germany too, also helps London wheat. It has to be noted though that the 9 MMT decline in European output signalled by the USDA on Friday is entirely compensated for by a 7 MMT hike in production in Russia and a 2 MMT rise for Ukraine. Add on another 2 MMT for Kazakhstan and the FSU more than makes up for this year's EU shortfall.
Indeed, Russia's grain harvest this year is 46.4% done at 72.7 MMT, is the Ag Ministry's figures are to be believed. That includes 51.1 MMT of wheat off 50% of the harvestable area. The official Ministry forecasts for a grain crop of 110 MMT and a wheat crop of 67 MMT therefore look eminently achievable. Too low some might say.
The Russian Ministry say that grain exports Jul 1 to Aug 10 were up 13% versus the same period in 2015 at 2.943 MMT. Wheat consisted of 2.348 MMT of that compared to 1.662 MMT a year ago.
Russian seaports shipped out 725.6 TMT of wheat grain week, up from 411.2 TMT the previous week, say APK Inform. That total included 634.4 TMT of wheat.
Ukraine's seaports were down a tad week-on-week at 660.1 TMT, including 413.1 TMT of wheat, but were still substantial nevertheless.
Morocco are tendering for 68 TMT of feed barley and Syria are in the market for 1 MMT of Russian wheat.
