EU Wheat Slips Following USDA Report

Posted by Nogger - a legend in his own mind at 10:34 | Categorized as

09/12/16 -- EU grains closed mostly mixed as the trade digested the latest raft of world supply and demand numbers from the USDA.

At the close Jan 17 London wheat was down GBP0.90/tonne at GBP134.90/tonne, Dec 16 Paris wheat was EUR0.50/tonne lower at EUR161.75/tonne, Jan 17 Paris corn was EUR0.25/tonne firmer at EUR164.50/tonne and Feb 17 Paris rapeseed was up EUR2.75/tonne to EUR412.00/tonne.

The USDA raised global and Australian production in 2016/17 to new records. Global trade was however also boosted to a new record with stronger import demand from Asia and Brazil. Larger exports for Australia and Argentina were partially offset by a decrease for Russia.

EU 2016/17 wheat production was raised 400,000 MT to just shy of 144 MMT and EU exports were left unchanged at 25 MMT (down 28% from 34.7 MMT last season).

Russian production was seen unchanged at 72 MMT, exports were lowered 1.0 MMT to 29.0 MMT due to slower-than-expected trade

Australia's crop saw a big hike, up from 28.3 MMT to 33 MMT, with exports also seen sharply higher a 23 MMT from 20.5 MMT previously.

The bottom line was a raise in world ending stocks of almost 3 MMT to a record of over 252 MMT.

In other news, Brussels announced that they'd only approved a paltry 88 TMT worth of soft wheat exports this past week, down 79% on the previous week. That takes the season to date total to 10.47 MMT.

Less than 35 TMT worth of barley exports were passed, taking this season's total to 1.76 MMT.

Trade talk suggests that India could be a large wheat importer for the remainder of the season. They're said to have already imported 1.72 MMT of wheat this year, with over 1 MMT of that coming from Ukraine, approximately 500 TMT from Australia and around 150 TMT from France.

Trade ideas are that they will need to import at least 3 MMT, and possibly as much as 5 MMT in total, due to quality and quantity shortfalls in their own 2016 crop.

Around 400 TMT of Ukraine wheat is rumoured to be held up on passage to India as exporters there concentrate their efforts on corn shipments. That could provide a short-term window of opportunity for EU wheat.