London Wheat Hits New Highs

31/10/16 -- EU grains closed mixed. Still, nearby London wheat pressed on to it's best closing levels in more than 2 years.

At the finish Nov 16 London wheat was GBP1.00/tonne higher at GBP140.00/tonne, Dec 16 Paris wheat was up EUR1.25/tonne at EUR165.75/tonne, Nov 16 Paris corn ended unchanged at EUR167.00/tonne and new front month Feb 17 Paris rapeseed was EUR1.25/tonne lower at EUR398.75/tonne.

There wasn't a great deal of startling new news around to start the week, but London wheat managed to build on the recent momentum settling at GBP140/tonne - a level not seen since late Jun 2014, despite sterling being little changed. A firmer tone to Chicago wheat to start the week helped. Paris wheat went along for the ride.

The recent dry weather means that water levels on the Rhine and Danube are low, disrupting shipping activity in the area, and in some cases forcing smaller cargoes than intended to be moved, resulting in higher per tonne freight costs.

Areas not affected by this can therefore command a little bit of an extra premium.

The wheat and rapeseed markets remain worried about the state of play in Canada, where extremely wet and snowy conditions are holding up the last of the harvest, causing lodging. Saskatchewan state still has 20% of it's canola crop left in the field, along with 19% of it's spring wheat.

The Russian harvest plods on however at 95% complete at 119.8 MMT in bunker weight. Wheat is 98.1% harvested at 75.8 MMT. Despite this though exports remain a bit subdued. Total Russian grain exports (to Oct 26) are 6% down on a year ago at 12.5 MMT. That includes 10.15 MMT of wheat and 1.41 MMT of barley.

Russian customs data shows that the country's seaports only exported 354.7 TMT of grains last week, down from 556.5 TMT the previous week. That includes 249.4 TMT of wheat, 2.8 TMT of barley and 99.5 TMT of corn.

Russian analysts IKAR today lowered their forecast for Russia's full season grain exports by 600,000 MT to 39.4 MMT.

The Russian Ag Ministry estimates winter plantings for the 2017 harvest are 97.3% complete on 16.9 million ha (versus 15.7 million a year ago).

Ukraine's seaports exported 851.5 TMT of grains last week, down from an impressive 1 MMT the week before. That included 426 TMT of wheat, 124.7 TMT of barley and 300.8 TMT of corn.

Private Israeli buyers are in the market tendering for 95 TMT of corn, 45 TMT of feed wheat and 30 TMT of feed barley, all of optional origin.