IKAR in Mass Media

PM markets: London wheat extends rally as pound tumbles

18 января 2017 года

London wheat futures extended their recent rally, fuelled by the tumbling pound, while milling wheat futures in Paris edged down, in a thin trade with Chicago markets closed for the US national holiday.

Prices for feed wheat in London are up nearly 9% in the last month.

"We've seen buoyant exports out of the UK," said James Bolesworth, at CRM AgriCommodites.

The ever-weakening pound is making UK supplies more competitive in the export markets.

And after a small and poor quality harvest in much of the EU, particularly in France, the UK has been able to win milling wheat market share in countries like Algeria.

"The fact that we've got quality this year puts us in a fairly competitive position," Mr Bolesworth said.

Mr Bolesworth said the market were supported by "expectation that stocks in the UK will tighten… with good exports to countries outside the EU".

In fact, given the pace of exports, Mr Bolesorth said that stocks could fall below 1.25m tonnes.

May London wheat futures closed up 1.4%, at a contract high of £150.25 a tonne.

March Paris wheat futures edged down 0.2%, to E169.50 a tonne.

Russian wheat futures edge higher

A stronger rouble is lifting Russian wheat prices, making it less competitive as an export destination.

Black Sea prices for Russian wheat with 12.5% protein were $183 a tonne at the end of last week, up $1 from late December, before the official January 1-8 New Year's holiday, Russian agricultural consultancy IKAR said.

SovEcon saw Russian wheat at $182 a tonne, up $0.5 since the end of December 2016. Russia had official New Year holidays between Jan. 1-8.

Russia exported 20.8m tonnes of grain in the season to January 11, flat year-on-year, the Russian Agriculture ministry said.

This figure includes 16.3m tonnes of wheat.

Black sea exports sag

Exports out of the Black Sea region were weak, Agritel noted.

"Ukrainian exporters loaded 150,000 tonnes of wheat, 300,000 tonnes of corn and 60,000 tonnes of barley during the last 7 days."

"Following 10 days of celebration in Russia, export activity was quite low as well. Only 215 000 tonnes of wheat, 33 000 tonnes of corn and 25 000 tonnes of barley were exported."

"Local operators are awaiting an increase of loading activity for the beginning of this week," Agritel noted.

Still, supplies from Russia and Romania won out once again in an Egyptian tender, with 135,000 tonnes bought.

Vegoils support rapeseed

"Rapeseed prices have been supported by a strong performance of palm oil and soybean," said Agritel.

"However, volatility remains limited on this market for the time being while operators wait for more details regarding the crops' conditions after winter."

"Temperatures are likely to decrease by mid of this week which, however, is not yet implying specific worries regarding winter rapeseed."

February rapeseed futures in Paris finished up 0.4%, at 416.45 a tonne.

Weak grind data

Cocoa prices in London trimmed the previous session's gains, after some disappointing demand data.

European cocoa processing fell in the most recent quarter, where markets were expecting an increase, data showed.

The Brussels-based European Cocoa Association said grinding was down 0.9% over the period, at 339,379 tonnes, where markets were an increase of between 1.5 and 2.0%.

German cocoa grinding was down more than 10%, at 94,909 tonnes over the period.

And cocoa grinding in the Cote D'Ivoire were also down, to 126,000 tonnes from the start of the season to the end of December, with 41,000 tonnes processed in December.

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