EU Wheat Mixed In Sideways Trade
A sideways trading pattern continues it would seem until we get a clearer picture of how northern hemisphere crops will emerge from winter dormancy.
Defra came out with some revised supply & demand numbers but there were no great changes to their previous estimates. "Wheat imports are supporting record UK consumption levels with little evidence that strong prices are dampening demand. UK imports to end-November were at the highest since 1993/94," they noted.
"Poor weather has resulted in strong demand for compound feed which is pushing higher the total demand for cereals in animal feed. Additional compound feed demand is mainly being met by increased barley and imported maize consumption, as these have been the most competitively priced grains," they added.
They upped their forecast for UK wheat imports this season, as expected, but by less than many in the market would have guessed - only 144 TMT to 2.19 MMT. They did comment however that "imported usage has continued to increase but has yet to find a steady level and consequently imports are challenging to forecast."
Wheat for Human & Industrial (H&I) consumption was forecast at 7.927Mt, 16% higher than 2011/12 but similar to previous estimates. H&I usage of home-grown wheat was reduced by 101 TMT cue to increase utilisation of imported wheat and also some degree of substitution with corn.
The total amount left over for export and carryover stocks was estimated at 2.3 MMT, which was 100 TMT more than projected in November although still a historically tight number.
In international news Syria bought 100 TMT of what is expected to be Black Sea soft milling wheat, possibly Kazakh origin, in their tender. South Korea bought 55 TMT of optional origin feed wheat, said to be most likely of South American or Indian origin. India seems the most likely, they put up a further 60 TMT of state-owned surplus wheat stocks for sale by tender today.
The market remains focused on South American weather as far as supplies for soybeans and corn are concerned, and also a little less concentrated on US winter wheat development on the Great Plains.
As far as the latter is concerned "Heavy rains were noted across southeastern Kansas, northeastern Oklahoma (and parts of the Midwest) yesterday and overnight...However, amounts were too limited to notably improve moisture in the central and western Plains.... Dryness will remain extensive in the Plains next week as showers continue to be very limited," say MDA CropCast.