EU Grains Mixed, UK Wheat Sailing For France

Posted by Nogger - a legend in his own mind at 08:20 | Categorized as

31/08/16 -- EU grains closed mixed. Wheat was mostly lower, corn mixed and rapeseed mostly higher.

At the close Nov 16 London wheat was down GBP0.95/tonne at GBP122.95/tonne, Sep 16 Paris wheat was EUR1.00/tonne lower to EUR154.25/tonne, Nov 16 Paris corn was down EUR1.75/tonne at EUR159.75/tonne, Nov 16 Paris rapeseed was EUR2.25/tonne firmer at EUR372.75/tonne.

Private reports continue to suggest that UK wheat, amongst other origins, is being shipped to France to help cover their deficit this season.

Egypt, the world's largest importer of wheat, picked up only one offer in their tender to buy 100% guaranteed ergot free wheat for Oct 5-15 shipment in their tender - Ukraine origin material at $179.32/tonne FOB.

Tunisia were also in the market for wheat today, and picked up 13 offers.

The most logical explanation for Egypt's hardball stance is perhaps an internal government power struggle. They are rumoured to be considering devaluing the pound and seeking financial help from the IMF.

They are already paying $5-7/tonne above the market for wheat due to their strict quality terms, which is a lot of extra un-needed cash when you buy 10 MMT a year. Today's tender was subsequently cancelled.

The Russian harvest rumbles on, producing 91.7 MMT of grains off 68% of the cultivated area, say the Russian Ag Ministry. That figure includes 63.5 MMT of wheat (71.7% harvested) and 16.9 MMT of barley (18.3%). Russian growers have also planted 2.7 million ha of winter grains (mostly wheat) for the 2017 harvest, or 15.7% of the expected area.

Indonesia, the world's second largest wheat importer, shipped in 5.69 MMT of the grain in the first half of 2016, a sharp 57.5% increase on the same period a year ago, report Reuters.

The top supplier was Australia (although their market share was reduced by almost half to 36.3%), followed by Ukraine (14.9%), Canada (15.2%) and the US (7%).