Wheat export licenses granted by Brussels this week gained momentum, despite of the stiff competition from Russian and Ukrainian origins, recording a level of 468 032 t for an aggregate of 6.35 Mt since the start of the campaign. In barley, licenses are in small evolution with a seasonal aggregate of 1.2 Mt.
Unsurprisingly, while world demand remains sustained, IGC has confirmed the European decline betting on a total of 25.2 Mt for export to third countries of soft wheat I.e. -25% from last campaign. Despite of the drop for outlets, the reduction of output volumes is leading to a report stock in diminution by -34%, i.e. more than 3 Mt, at 10.6 Mt.
After first harvest of corn, the situation in Europe looks very different compared to the US or Ukrainian one. In these two countries, volumes are expected in sharp rise compared to last season. IGC has revised up the perspectives of world output that should exceed 1.02 billion of tonnes.
Cereals were in small progress on Euronext yesterday and rapeseed prices were up by +3 €/t on front contract, erasing the drop of the beginning of the week.
Prices were in little evolution in Chicago, traders are now expecting the new estimations from USDA for quarterly report about US stocks. Business should remain subdued until there and limited to positions adjustments.
Concerning export sales, soybean marked a further progression in the week, with a volume of 1.69 Mt, which is over traders’ expectations. From the start of the season, aggregate export volume is now exceeding the level of 2013-14 and is close to the record season of 2014-15. New sales to China have been reported, supporting the market.
Corn export data have been disappointed with only 575 000 t, well under expectations. Despite of low prices, the market is slowing down from the beginning of the month. However, in the context of a bumper harvest, volumes already sold are close to highest levels of these last ten years with more than 18 Mt sold, which represent 1/3 of the target of 55 Mt for 2016-17.
Black Sea market
The majority of operators remember last year dry conditions, which impacted Ukrainian wheat, so they had to lose part of their wheat harvest. What about current year wheat sowing works? By the end of last week, near 1,7 Mha or 27% of forecast acreages is sown (last year 2.1 Mha on this date). Indeed, this year is seen a delay in sowing by 20% compared to last year. Authorities forecasts for wheat sowing acreage at 6,2 Mha, last year was expected 6,0.
On the other side, Russian farmers keep last year pace of winter grain planting. Sowing of winter crops for the harvest-2017 done in the area of 11.1 million hectares or 64% of the target area (in 2015 - 11.2 million ha.). Official forecast of wheat sowing acreage is a bit higher than last year at 17 Mha (16,9 Mha in 2015).