London Wheat Sets More Than 2-Year High

26/10/16 -- EU grains closed mostly higher, with nearby London wheat settling at it's best levels in more than 2 years.

At the finish Nov 16 London wheat was GBP2.00/tonne higher at GBP138.35/tonne, Dec 16 Paris wheat was up EUR0.75/tonne at EUR163.50/tonne, Nov 16 Paris corn ended EUR2.75/tonne firmer at EUR164.50/tonne and Nov 16 Paris rapeseed was EUR5.00/tonne higher at EUR396.25/tonne.

Chicago grains were all sharply higher, which spilled over this side of the Atlantic. London wheat closed at the highest since the last day of June 2014. This surprising strength in futures may have caught a few shorts by surprise.

"Part of the support has come from wider European movements on the back of the ongoing stronger export demand. However, the movements in UK futures were larger....gains may be linked to the approaching end of the Nov-16 contract, for which yesterday marked the start of the tender period, the last trading day is 23 November," noted the HGCA.

Rapeseed futures were sharply higher as US soybean prices surged and held above key resistance at $10/bushel and Malaysian palm oil prices firmed to the near two-and-a-half year highs seen at the start of the week.

Concerns remain over the health of EU winter rapeseed plantings for the 2017 harvest, particularly in France, as highlighted by the EU Commission's MARS unit earlier in the week.

The head of the Russian Grain Union said that this year's total clean weight grain harvest could be in excess of 116 MMT (versus 104.8 MMT last year), pegging export potential in 2016/17 at 38-40 MMT.

The Russian Ag Ministry said that harvesting so far was 94.5% complete at 118.9 MMT in bunker weight. That includes 75.8 MMT of wheat (98.1% harvested) and 19.1 MMT of barley (97% harvested). Corn harvesting is ongoing at 8.9 MMT (55.1% complete).

Trade gossip continues to suggest that a higher proportion than usual of this year's Russian wheat crop is feed only grade. This might slow exports in the second half of the season if true. It would also increase carryover stocks at the end of the season.

Russian winter plantings for the 2017 harvest are said to be 95.6% complete on 16.6 million ha.

The Ukraine state weather centre said that the arrival of colder than normal temperatures had slowed down, and even halted, the development of winter grains there. The last figures from the Ag Ministry showed winter wheat planting at 86% complete. Winter barley was only 59% sown as of Oct 25.