Declining US wheat conditions Ukraine tensions underpin market
Declining US wheat conditions, Ukraine tensions underpin market
EU grains closed mixed with May 14 London wheat unchanged at GBP170.25/tonne, and with new crop Nov 14 GBP0.05/tonne lower at GBP161.50/tonne. May 14 Paris wheat closed EUR0.75/tonne lower at EUR213.00/tonne, Jun 14 Paris corn was down EUR0.25/tonne to EUR185.75/tonne and May 14 Paris rapeseed rose EUR4.25/tonne to EUR408.75/tonne.European wheat futures were mostly steadier in morning trade following another strong performance last night in the US, although yesterday's gains were tempered a little in the overnight Globex session. The daytime open outcry CBOT session continued to display a little weakness, which largely spilt over into European trade late in the day.Declining US wheat conditions, large-scale fund buying and continuing tensions between Russia and the West/Ukraine underpin the market - at least for now. There are plenty however who think that more than enough risk premium has been added from the January lows. It's always dangerous when the main buyers in the market don't actually want to take delivery of the product that they are purchasing.Kansas, Oklahoma and Texas winter wheat conditions all fell versus a week ago in last night's various state reports. Kansas good/excellent wheat is now 33% versus 34% a week ago, with Oklahoma rated 17% good/excellent against 18% last week and Texas down to 11% good/excellent from 13% last week. Only very light showers are in the forecast for the region this week.UkrAgroConsult said Ukraine exported 2.019 MMT of grains between March 1-24, as shippers push exports aggressively to keep their cash flow moving. Early spring grain plantings there are already past halfway done.Russia said that it had exported a record 422.3 TMT of corn in February, a near threefold increase on a year previously. Sep/Feb corn exports are now at a record 2.343 MMT, which is more than the volume exported in the whole of 2012/13.The Ministry there said that spring plantings had been completed on approaching 400,000 hectares of the planned 31.8 million.SovEcon estimated Russia’s 2014 grain crop at 88.0 MMT, up 2 MMT from a previous estimate of 86.0 MMT, but down 4 MMT on last year's 92.0 MMT. They estimate 2014/15 grain exports at 22.0 MMT versus 24.1 MMT in 2013/14 (exports so far this season currently stand at around 20 MMT).Whilst there is no winterkill threat in the Black Sea region, parts of Russia and Ukraine are still experiencing drier than normal conditions. Some respite is in the forecast for western Ukraine and north/central parts of Russia. Eastern Ukraine and southern Russia lot set to remain dry.There's widespread talk of rain being needed in eastern Australia to replenish soil moisture ahead of planting a month or two from now. Good rains appear to be on offer for Queensland, NSW, Victoria and Southern Australia in the 8-15 day time frame.There’s also talk that Australia could be in for an El Nino year in 2014, which typically brings them below average rainfall and above average heat.Both the GFS and CMC weather models are a bit drier for Europe across the next few weeks than they were yesterday, when good rains were in the forecast for many. Germany looks set to remain dry.
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