EU wheat, US soybean export data surprise markets

Export data handed two surprises to investors, by showing European Union wheat shipments at their highest of the season, defying ideas of a slowdown, and revealing unexpectedly strong sales of US soybeans too.

The data allowed Paris wheat futures to recover to close higher, but a jump in soybean prices proved only temporary.

Although Chicago soybeans for May jumped 3.4% to $14.45 a bushel, the highest for a nearest-but-one contract in seven months, the contract closed at $13.90 a bushel, down 0.5%.

"The markets are heavily overbought and are due for a correction," US Commodities said.

Positive surprise

The US Department of Agriculture revealed that importers bought 328,000 tonnes of US soybeans last week for delivery this season.

While not in itself a huge figure, it defied expectations of a slowdown in purchases given the competitive prices of South American supplies, and increasing certainty of a bumper Brazilian.

Indeed, many investors had been expecting the USDA data to show cancellations exceeding new orders.

Forecast mismatch

Instead, the exports lifted to 43.5m tonnes the amount of soybeans that the country has sold for 2013-14, half way into the season.

And this excludes a further 112,000-tonne sale to China announced separately on Thursday by the USDA, although the buyers have granted merchants "optional origin" on this order, meaning it could be sourced from outside the US.

The weekly figure also excluded Tuesday's surprise 568,000-tonne order, thought to have been made by Indonesia.

The USDA has pencilled in exports of only 41.1m tonnes (1.51bn bushels) for the whole marketing year, although Richard Feltes at RJ O'Brien said that this "may be understating" US soybean exports by some 30m-50m bushels

Best week for wheat

The USDA statistics came shortly after the European Union reported its best weekly soft wheat exports of 2013-14, ending in June, of 932,000 tonnes, up from 756,000 tonnes last week.

The increase took to 20.1m tonnes the bloc's soft wheat exports so far this season, up from 13.1m tonnes a year ago.

It also defied expectations of a slowdown in shipments, given signs of a drop in volumes being loaded at French ports, and relatively high prices in Europe, where Paris Matif futures have surprised commentators by defending a healthy premium over Chicago values.

'Better understanding'

Indeed, Jaime Nolan Miralles at FCStone said that the data gives a "better understanding of this week's push on Matif", a reference to resilient prices of Paris wheat futures.

Commerzbank on Wednesday warned Paris prices should "show a less favourable trend" given increased competition on export markets, and the healthy condition so far of EU winter wheat seedlings.

In fact, French wheat failed to win any business at the first tender by Egypt's Gasc grain authority this month, being undercut by Romanian and Russian supplies.

Nonetheless, Paris wheat for May recovered early losses to close up 0.3% at E198.00 a tonne in afternoon deals, outperforming its Chicago peer, which slumped 2.4% to $5.89 a bushel.

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