RSS
Twitter
Linked In
News In
Markets
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Evening markets: Russia export news scares wheat market

Twitter Linkedin

What a day for Paris to take the limelight.

With US markets closed for the Memorial Day holiday, it was the Matif which provided the conduit for investors' reaction to Russia's decision to lift its grain export embargo, as from July 1.

"We do know that there have been only favourable reports of the Russian winter

wheat

crop almost since it was drilled," a leading European commodities house said, while adding that "a number of analysts still maintain that the spring wheat crop is in need of rain".

Whatever, Russia has a reputation as being fiercely price-competitive on

'A bit jittery'

For much of the day, investors' response was pretty relaxed, limiting losses to less than 3%. But nerves failed in the closing minutes to send the benchmark November lot down 4.9% to E238.75 a tonne by the finish, not too far off its intraday low.

"You can't blame people for getting a bit jittery," said a grain trader in the UK, where London's futures exchange was also closed for a national holiday.

Sure, the move "was hardly a surprise, and it's not clear how much Russia will actually export".

And "it was not until June that last year's [Russian] drought became apparent", meaning that wheat was unlikely to lose all its risk premium overnight.

"But you can understand people want to play it careful, until we see the reaction from the US."

How much?

As for estimates for Russia's exports, SovEcon, the Moscow-based analysis group, has pegged them at about 15m tonnes –all grains – while lobby group the Russian Grain Union said on Monday that 20m tonnes might be achieved.

For wheat only, "the market estimates Russian exports will be around 8m-10m tonnes in 2011-12," Australia & New Zealand Bank said.

Sure, that is higher than the 4m tonnes expected for 2010-11, following last year's drought-damaged harvest, but below the previous three-year average of 16m tonnes.

And analysts are lowering forecast for the European Union wheat harvest, and exports, too, although some rains on Monday may have improved the dryness a touch. (The western England area around Agrimoney.com's office received some nine hours of moderate but consistent rains.)

Winning streak ends

The weakness spilled over a little into the

rapeseed

market too, although this was not a crop included in Russia's export ban, which has run since August last year.

Paris's August lot closed down 0.4% at E492.00 a tonne, despite comments from Toepfer, the grain trading house, that Germany's rapeseed crop, Europe's biggest, had suffered irreversible damage from dry weather (having already sustained relatively high winterkill losses) and could fall by more than 20%.

The decline was the contract's first fall in 12 trading sessions.

In Canada, futures in rapeseed variant

canola

stood down 1.1% at Can$593.30 a tonne in late deals.

Season upticks

In Asia,

palm oil

earlier fell back from a two-month high, closing down 0.9% at 3,408 ringgit a tonne in Kuala Lumpur for August delivery, the benchmark contract.

With production enjoying a strong seasonal rise, traders said they were looking for evidence of firm consumption before committing.

And in Tokyo,

rubber

edged lower, down 0.7% to 387.80 yen a kilogramme as of the evening session (counted as part of Tuesday's trading) also held back by a seasonal production increase, in top exporting country Thailand.

By Agrimoney.com

Twitter Linkedin
Related Stories

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too

Evening markets: ags overlook crumbs of comfort in Wasde to set fresh historic low

The Bcom ag commodity subindex ends at a fresh record low, as US export fears overtake upbeat interpretations of corn, cotton estimate revisions

Evening markets: Ags poop party lifting other commodities, shares

Wheat futures set another contract low, while arabica coffee hits its weakest close but one in 19 months, despite buying in other asset classes
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069