Nogger's Blog: EU Grains Lower, French Exports Lag But Indian …
At the finish, Jan 16 London wheat was down GBP0.80/tonne at GBP110.20/tonne, Mar 16 Paris wheat was EUR2.25/tonne lower at EUR169.25/tonne, Mar 16 Paris corn was down EUR2.00/tonne at EUR158.50/tonne, whilst Feb 16 Paris rapeseed fell EUR2.75/tonne to EUR364.00/tonne. Fresh news was light, although we can’t say that tomorrow with a deluge of data due to be released from Washington and beyond. What we do know is that EU exports are behind last year’s pace and need to improved if we aren’t to be left in the position of another very large carryover into the 2016/17 marketing year.
French soft wheat exports to non-EU homes were 628 TMT in November, down 100 TMT on the previous month. Barley exports slowed to 124 TMT in November as the “new” early season demand from China waned. The top home for French wheat outside the union in November was Algeria taking 226 TMT. Cheaper long-haul freight rates helped the French export wheat to Indonesia for the first time since the 2008/09 season. French 2015/16 soft wheat exports to non-EU destinations are now 3.3 MMT, down 6% year-on-year. Exports within the EU have fallen 22% to 2.8 MMT, taking total exports to 6.1 MMT, a 14% decrease compared to a year ago.
Reuters also reported that the three vessels awaiting letters of credit from Egypt’s GASC to load wheat are still waiting outside the port of Dunkirk. Shipments out of Ukraine remain strong. APK Inform said that Ukraine seaports exported 918.8 TMT of grain over the holiday period Dec 28 to Jan 10. That included 394.7 TMT of wheat and 494.1 TMT of corn. Barley shipments in the period were only 30 TMT, adding weight to the theory that these are just about done for the season already.
Russia’s exports were less impressive due to the long break – much of the country is closed for the orthodox holidays the first week in January off. Their grain exports via seaports for the same period totalled 258.4 TMT, including 200.9 TMT of wheat, 12 TMT of corn and 33.1 TMT of barley. Concerns about dryness issues in India are getting increased amounts of media coverage.
For sure they have huge stockpiles of wheat left over from previous seasons in their government stockpiles, but the quality of much of this grain is highly questionably. Last season’s harvest itself was low on quality due to heavy March rains immediately prior to harvesting, causing a rush to import quality Australian wheat for blending early in the season. The word is that the need to import better quality wheat could be even more urgent than last year, and that the net might need to be cast a bit wider wider than just Australia, although there are phytosanitary hurdles to get over importing wheat from some other countries. Separately, state-owned PEC have released a tender to purchase 290 TMT of optional origin corn for Jan/Feb shipment – suggesting that all might not be well with that crop, harvesting of which is taking place now.