Pre-Opening Wheat Market Report for 9/16/2010
Related Keywords: Agriculture Email Print | December wheat was 1 1/2 cents higher overnight. The dollar was lower. Traders indicate that the wheat market is responding to swings in the dollar as well as crop developments in the Southern Hemisphere and the Black Sea region. The December contract posted strong gains to start the overnight session and then trimmed those gains into this morning. This comes against a background of continued strong export demand with France maintaining some of its advantage over the US in the crucial North African and Middle Eastern wheat market. Export licenses issued by the EU rose last week to 943,000 tonnes. Licenses issued for the first 10 weeks of the marketing year are up 21.2% from last year at a total of 4.28 million tonnes. With Germany on the sidelines, this export activity is mainly from France. Traders report that various cross-currents are in play in the Black Sea region as Russia and Ukraine monitor planting conditions into the winter wheat planting season. Ukraine’s Prime Minister said late last week that the government will not limit exports, but traders report long delays for ships currently at ports as the government goes through strict inspection procedures. Many analysts assume that Ukraine’s exports will remain largely within the Black Sea region including some shipments to Turkey which may be re-exported as wheat or as flour to other countries outside the region. Ukraine’s minister of agriculture estimated yesterday that country’s total grain harvest for 2010 at 38 million tonnes, down from 40-41 million last month. Poor soil moisture is still considered a problem in eastern Ukraine, Russia and Kazakhstan. Japan bought 146,786 tonnes of wheat on its regular weekly tender. Private Israeli buyers reportedly bought 40,000 tonnes of feed wheat. Bangladesh reissued a tender for 50,000 tonnes of wheat and they are also looking to buy 30,000 tonnes of rice. Egypt bought 295,000 tonnes of wheat yesterday which included 180,000 tonnes from France, 60,000 tonnes from Canada and 55,000 tonnes of soft white wheat from the US. In addition, Tunisia issued a tender for 67,000 tonnes of wheat yesterday. UK customs data show that wheat exports were up 52% in July versus last year to 251,733 tonnes. The USDA will issue its latest Export Sales report this morning. Last week’s US export sales were the largest in 3 years at a combined total of over 1.6 million tonnes.