- We have seen a second day of price decline in both London & Paris wheat markets, brought about by very little in the way of fact based or market derived data. Our assumption therefore is that the decline is “drift” rather than direction! Rumours of Baltic wheat being traded into the Russian port of St Petersburg remain just that, rumours, and we continue to await the outcome of Russian deliberations on the state of their tight wheat position, and, more importantly, how they manage the position going forward.
- Brussels issued a further 390,000 mt of wheat export licences bringing the season total to 12.032 million mt, which compares with 9.749 million mt last year. This is 2.283 million mt more (23.4%) than a year ago. Clearly the USDA’s opinion on total EU exports for the season either needs to be revised, serious grain import volumes need to be addressed or the pace of exports to date needs to be curtailed – and soon. Given the non-availability of the usual Black Sea competition it would seem that the USDA’s figure is looking on the light side. Intra-EU grain movements make interesting data, feed demand, particularly in northern Europe, remains steady with poor quality and volume forage driving reasonably strong volumes.
- We hear of milder weather conditions in southern Russia and Ukraine causing snow melt which has the potential to expose crops to freezing conditions, particularly at night time. The lack of a good blanket of insulating snow leaves crops susceptible to winter kill should temperatures drop sufficiently low, which would not be unusual in these regions.
- We would remind that the southern Russian crop was planted in extremely dry conditions with some crops not even germinating, such was the effect of the drought. Soil moisture deficits have not yet been replenished and the crops will be in need of plentiful moisture in the immediate and critical emergence period following winter dormancy if potential is to be fulfilled.
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