Blog

European MATIF wheat futures closed the week down slightly at 210.75 euro/mt from Monday’s open of 211.50 euro/mt after Russian-Ukrainian tensions pushed up values across all contracts months…although a signifcantly less rally than seen in prior weeks…EU wheat licenses contiue to be issued at a steady pace with 596,000mt issued during the course of the week…including 536,00mt of soft wheat…giving a marketing year total of 23.2 mmt compared to 16.4 mmt year-on-year…interesting to note that the 2012/2013 export total came in at 22.6mt…so this point has already been suppassed…Looking forward at growing progress…reports from France Agromer indicate that the French winter wheat crop is rated as being 75% good/very good…up 8% year-on-year…as mild weather continues into March…first predictions of EU-28 yeilds came in at 5.47mt/ha, a reduction year-on-year from 5.57 mt/ha…however…moving East reports from brokers in Baltic Region indicate that the coming weeks will be cruial for Lithuania and Latvia…where unfavourable wheather could result in the need to replant 50/60% of wheat as cold weather contines to ravege the crop…intersting to note the brokers comment that lower yields and lost area could result in a 800,000mt – 1,000,000mt reduction on 2013 production figures…although there is still some time…looking South East…Ukraine’s Ukragoconsult indicated that the Ukrainian total grains harvest would be down year-on-year at 53 mmt…with wheat accounting for 19.6mmt…as continue economic and political woes baredown on the country…however…one thing to bear in mind in light of the current situation is the finacing of this…

US exports figures for the period 7-13 March were down 16% week on week at 401,800mt and down 12% in the 4 week average as continued price escalation and logistic problems slowdown US exports…speaking to cash brokers over the previous 7 days indicated that the early available loading slots out of the USG are now FH May…Market rumours surfaced this week indicating that Russian/Ukrainian wheat was replacing HRW into Brazil, Nigeria and Peru…with talk of $50.00/mt discounts on the table in some cases…the Kansas City market came off on the day dropping as low of 768.25 from the open of 782.00 before closing at 771.25 c/bu…it was reported that 2-3 shipments to Brazil were replaced with Ukrainian wheat…but as far as we can ascertain in respect of Russian wheat…this can only be shipped to Port Mills… weather concerns are also weighing in to the melting pot where dry conditions are declining winter wheat ratings…the KWK14 futures contract ended the week up 20.75 c/bu at 771.25 whilst the Chicago and Minnapolis contracts were up 6.25 c/bu and 12.75 c/bu respectively…

Logistics remains the key challenge for the industry as the flow of cargo yet again came to a grinding halt as bad luck really does come in threes…this time it was the turn of Argentina where the past 14 days has seen not 1, not 2…but 3 vessels run aground in the Parana river…the key export corridor for Argentine and Paraguayan product…the first vessel the MV Paraskevi grounded on the 10^th March before being finally afloat 11 days later following one channel closure and a lengthy lightering operation…however…not less than 48 hours and one coastguard bathometry survey later…the MV Cleanthes ran aground in a similar position again ceasing up and downstream navigation…tugs were mustered and the Cleanthes was refloated 24 hours later…However…whilst all eyes were on the Cleanthes, the MV Dragon become the third casualty of the month going around in the same area…fortunately enough she was not blocking the channel and managed to refloat by her owns means…Dredging in the river has now began with the channel expected to be reopened shortly…However…the damage looks to be already done with terminals now facing a backlog of vessels to load…and with the Argentine “Strike Season” nearly upon us…the message is clear…expect delays loading in the River…Unfortunately…vessel problems have not been confounded to the River Parana with the USG also sharing in the misfortune…where in Houston a collision between a bunker barge and vessel has closed the channel…with expectations that it will not re-open until as late as the 29^th March…It wouldn’t be a report without as mention of Canada where ice is the latest problem in a long list exporters face…

Independent Source (unedited).