EU wheat markets closed mostly lower
EU wheat markets closed mostly lower
EU wheat markets closed mostly lower, on what looks like profit-taking and book-squaring ahead of tomorrow's USDA report and an easing of tensions in Ukraine. Old crop months displayed the most weakness on wheat. Rapeseed firmed in line with gains in soybeans and corn was mixed.May 14 London wheat closed down GBP2.30/tonne at GBP163.70/tonne, and new crop Nov 14 London wheat was GBP0.80/tonne weaker at GBP156.95/tonne. May 14 Paris wheat closed EUR3.00/tonne lower at EUR208.00/tonne, Jun 14 Paris corn was unchanged at EUR184.50/tonne and Aug 14 Paris rapeseed ended the day EUR4.00/tonne higher at EUR357.00/tonne.The USDA will release their first estimates of the season for world crop production for the 2014/15 marketing year tomorrow. They will also issue revised 2013/14 ending stocks forecasts, as well as looking into carryout next season for the first time. The trade will be keen to see what they make of US winter wheat production prospects, given the recent widely reported sharp decline in crop conditions. They will also give us early indications on US 2014 corn and soybean output.We'll also get their initial ideas on wheat, barley, corn and oilseed rape crop potential here in Europe for 2014. On top of all that, production prospects for the Black Sea nations will also make for interesting reading.With all that to come, then it's maybe not surprising that some of the spec money may have been taken off the table, particularly given Russian President Putin's suddenly "softer" stance on the Ukraine situation.The Bank of England kept UK base rates on hold at 0.5%, with QE also unchanged. That saw the pound little changed either way, which continues to hover around a 5 1/2 year high against the US dollar, and close to its best levels against the euro in well over a year. The prospect of higher interest rates here, earlier than any upward revision in the US or Europe, is what is keeping sterling strong. The ECB also left Eurozone rates unchanged at 0.25%.Defra reported the total volume of wheat milled in the UK in March at 561.4 TMT, down 5% on a year ago. That brings the 2013/14 marketing year to date total to almost 4.8 MMT, a 4% decline versus last season. At least the proportion of home grown wheat used in the March grind was significantly better, at 83% against 66% in March 2013 - although on a cumulative season-on-season basis there's little change.The FAO's Agricultural Market Information System (AMIS) estimated the global wheat crop would fall from a record 715 MMT to 702 MMT in 2014/15, although ending stocks will rise by 2 MMT compared with this season to 180 MMT."Overall growing conditions are mostly favourable in the northern hemisphere, and in many western regions development is ahead of average due to warm temperatures. However, concern continues in the US southern plains due to persistent dry conditions. In both US and Canada there are delays due to the cold winter and spring," they observed."In the EU, prospects are generally favourable, and close to 2013. Warmer-than-usual weather continued, leading to advanced vegetative development. The dryer spring compensated for the very wet winter and was favourable for fieldwork and sowing of spring wheat, with the exception of Ireland and Scotland," they said."In Russia, conditions are mostly good and winter wheat development is between 1 to 2 weeks ahead of average. In central growing areas, warm and dry conditions developed in mid April and precipitation is needed in coming weeks," they noted. Crop conditions in Ukraine are very similar, good and advanced, but with rain needed soon, they said. Conditions for corn sowing and early crop development in Europe are normal, they added.MDA CropCast raised their forecast for EU wheat production in 2014 by 900,000 MT from last week, due to generally improving conditions, although some dryness in southern France and Spain was noted.Ukraine are still out there pitching, despite their internal problems. Ukraine origin wheat was the cheapest offer in a Lebanese tender for 30,000 MT of milling wheat for arrival by Jun 2.Late in the day we had news that Brussels only cleared 130 TMT of soft wheat export licences this past week, the lowest weekly total for some considerable time. Even so, the frenetic early pace of exports still puts the seasonal total at a record 25.2 MMTEU corn import licences for the past week easily beat those granted for wheat exports, totalling 301 TMT, and bringing the marketing year to date total to 12.3 MMT.
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