Nogger's Blog

11/03/13 -- EU wheat futures closed mixed, but mostly a little higher. After a week where nearby prices closed lower every day last week, every little helps I suppose.

On the day, London wheat closed with Mar 13 down GBP0.95/tonne at GBP195.30/tonne and new crop Nov 13 GBP1.25/tonne higher at GBP184.00/tonne. Mar 13 Paris wheat went off the board today, new front month May 13 was EUR3.25/tonne firmer at EUR233.50/tonne.

After a busy week on the news front last week, culminating in the USDA report on Friday, the week ahead promises much less in the way of excitement at this stage.

An acutely weak pound traded either side of 1.49 against the US dollar, and even managed to decline against the euro today, itself under pressure following a credit rating downgrade for Italy from Fitch Ratings on Friday night.

Friday's USDA report included a 1 MMT upgrade to the EU's 2012/13 wheat exports to 19.5 MMT, export licenses for 13.7 MMT of soft wheat have already been issued by Brussels, along with 750 TMT of durum wheat.

The USDA said that Egypt will import 1 MMT less wheat this season than it anticipated last month. Iran (+1 MMT), South Korea (+0.5 MMT), Algeria (+0.3 MMT) and China (+0.2 MMT) will import more than forecast in February, they said. EU-27 ending stocks were cut 0.5 MMT to 9.5 MMT.

Ukraine said that they have now exported 18.2 MMT of grain so far this season, up 38% on a year ago. That includes 6.2 MMT of wheat, 9.7 MMT of corn and 2 MMT of barley. Spring plantings are said to be 5% complete. They are also now getting much colder temperatures and snow, like much of the rest of Europe, which could harm unprotected crops.

India are said to be rejecting bids against last week's wheat tenders as being too low, with the last traded price of USD303.40 FOB said to be the minimum level that they are prepared to take. Subsequent bids have been in the USD297-300 range.

Oman bought 20 TMT of Canadian wheat for April shipment over the weekend. At the moment there are no high profile wheat import tenders pending, although it is rumoured that Saudi Arabia may be back in the market soon to supplement their recent 575 TMT wheat purchase from the US, EU and Australia.

Favourable precipitation was reported to have moved across the north central Plains over the weekend. Also, active rains in the southwestern Plains and west central Midwest further improved moisture there. "Much warmer temperatures across the Plains this week will melt snow in north central areas, and will spur winter wheat spring growth in southern areas," said MDA CropCast.

More US ethanol plants are said to be bidding aggressively for wheat due to high prices and limited availability of domestic corn.