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Wheat Market Update - Friday 18th November 2005
UK
• While we have commented recently about the lack of farmer selling,
recent indications show selling has been steady and merchants have been
buying in against sales made previously. Some traders have commented
that farmers have “at least” one third of their crop left
to sell. This implies that selling may have been at a greater pace recently
than the market was reading.
• UK exports are gaining competitively on Black Sea origins. Market
estimates are that 1 mmt exports will have been achieved from the UK
through December. That will leave a balance of 1.2-1.5 mmt to be exported
for the balance of the season, according to most estimates. Export demand
has been slightly supportive to wheat prices in the south of the UK.
• LIFFE futures market continues to be range-bound.
• USD very strong yet at $1.7115 per sterling, keeping North American
imported milling wheat prices very firm.
• Expect relatively quiet cash wheat markets over the coming holiday
period.
European Harvest
• Free market refund of euros 5 for 118k mt.
• Germany suffering some logistical problems due to low water in
their river systems.
• High quality German E milling wheat supported by good domestic
demand and exports (due to strong North American market).
North America
• Futures range-bound as well, but testing short term support
levels.
• Southern plains and Delta regions in need of moisture.
• Lakes export program nearing end of season for shipment of DNS.
• DNS premiums holding firm. Ocean freight steady.
• USDA world wheat production estimate now 610.6 mmt (vs. 608 mmt
Oct and 625.7 mmt last year).
Other World
• Argentinean weather has been rather cool recently, although
it is not known yet if any damage has been caused.
• Bird flu concerns in the forefront and impacting feed demand
in some markets.
• Some Australian wheat crop estimates are approaching 25 mmt.
Wheat Market Update - Thursday 10th November 2005
UK
• Farmer sales over the past few weeks has been steady, but may
shortly enter another slow period leading to holidays.
• LIFFE is back to being a very quiet market with tight range.
• Wheat quality continues to be generally good.
• New crop ’06 selling ideas are at a premium to ’05
harvest, but little if any trade thus far.
• Planted area reduction for ’06 harvest still in the 5-10%
range.
• North American import prices firm, yet due to strong futures,
premiums and the dollar.
Europe
• Free market refund down to about €7.50 (from €8 prior).
• Black Sea origins beating EU exports by only $4-5 currently.
North America
• U.S. farmers are selling slow, supporting spring wheat premiums
and futures.
• Southern U.S. plains dry (supporting HRW futures).
• Australia crop estimate up to 24.5 mmt. Though too much rain
in areas.
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