EU Wheat Rises As Cyprus Fears Ease

Posted by Nogger - a legend in his own mind at 19:31 | Categorized as

19/03/13 -- EU wheat futures closed higher as fears over the wider consequences of the Cyprus bailout, and the risk of contagion across Europe, eased a little.

On the day, London wheat closed with Mar 13 up GBP1.15/tonne to GBP194.50/tonne and new crop Nov 13 also GBP1.15/tonne higher at GBP183.90/tonne. May 13 Paris wheat was EUR3.75/tonne firmer at EUR238.50/tonne.

Fresh news was relatively light. Ukraine said that they'd shipped 921 TMT of grains so far this month, almost all of which was corn (861 TMT). For the marketing year to date that means that they've exported 18.72 MMT, a 30% increase on this time a year ago, of which 10.14 MMT has been corn, 6.2 MMT what and 2.02 MMT barley. Optimism remains high for a good crop in 2013.

The Ukraine Ag Ministry said Ukraine will export a further 6.6 MMT of grain (including 4.7 MMT of corn) between now and the end of season.

Russia's grain stocks as of March 1st were 20.4 MMT, down 30% on year ago levels announced the Ministry. They sold 55, 533 MT of intervention grain in today's government tender, bringing the total sold so far since sales began to 2.37 MMT.

SovEcon estimate Russia’s 2013/14 grain exportable surplus at 16.0 MMT versus 15.1 MMT this season. The grain crop in the Southern Region of Russia was estimated at 28-30 MMT versus 24.1 MMT in 2012.

Officials in India are set meet this week to discuss the release of an additional 5 MMT of wheat for export. Top the agenda must be whether they will/can afford to drop their price aspirations following the market's recent move lower. They are said to have released another 65,000 MT of wheat for export overnight.

Egypt announced that it expects wheat production of around 9.5 MMT this year, if good weather conditions continue. Domestic stocks are much lower than normal amidst the financial and political crisis there, and there is talk of bakeries going on strike as they say that the government owes them 400 million Egyptian pounds in unpaid refunds for subsidising bread prices.

US winter wheat conditions improved in the top two winter wheat states of Kansas (up 2% good/excellent to 29%) and Oklahoma (up 4% to 24% good/excellent) in the past week. However, in Texas the same proportion of the crop rated good/excellent fell two percentage points to 16%.

Bangladesh have re-tendered for 50 TMT of optional origin wheat for April shipment. Libya are also in the market for 30,000 MT of milling wheat, along with Iraq for 50,000 MT. North African buyers Algeria seek 50 TMT of optional origin milling wheat for June shipment and Tunisia are shopping for 67 TMT of optional origin soft wheat for April/May shipment. France is frequently the usual supplier to the latter two.

The market is biding it's time now ahead of next week's quarterly stocks numbers and March planting intentions report from the USDA. Informa are due out at the end of this week with their 2013 US acreage estimates.