Grains - Grain Products

Wheat: boosting the market with export quotas

April 20, 2020 1:05 PM, Der AUDITOR
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FRANKFURT. The wheat market grew noticeably in the USA and Western Europe. This was mainly due to statements by Russia and the Ukraine that exports would be suspended as soon as export quotas or export targets were exhausted. This stimulated higher wheat export expectations in the USA.

In the morning, wheat in Paris was quoted at EUR 201.75per metric tonne, 2.5% higher than last Friday, and in Chicago at USD 5.43 per bushel, 3% higher than one week before. On the Black Sea, the front date rose by 0.2% to USD 226.50 per metric tonne. In the US, HRW and SRW wheat recovered after Russia's Deputy Agriculture Minister Oksana Lut reaffirmed that wheat exports would be suspended until 1 July, once the second quarter export quota of 7 million metric tonnes had been exhausted. According to the trade, this could be the case in mid-May and then lead to an export revival for US wheat. The trade confirmed that Russia's export volume has long been priced into the market, but not that the export quota could already be exhausted by mid-May. This could drive up wheat prices until the new harvest before the new crop is available. A clever move by the Russians, according to the trade, is to divert attention from Eastern Europe's higher new crops, but in return to reflect in the short term on lower stocks and security of supply in Russia in order to keep domestic prices low and at the same time sound out higher export prices.

Wheat, daily price development

Milling wheat (12/220/76)

Parity

EUR/mt

Diff.

Rouen, FOB

195.00

2.00

Creil, FOB

189.00

2.00

Hamburg, DDP

202.00

2.00

Westphalia, DDP

198.00

2.00

Rhineland, DDP

196.00

0.00

Upper Rhine Region, FOB

191.00

0.00

Feed wheat (72/73)

Parity

EUR/mt

Diff.

Netherlands, CIF

200.00

0.00

South Oldenburg, DDP

198.00

0.00

Westphalia, DDP

196.00

0.00

Upper Rhine Region, FOB

190.00

0.00

Trade sources

Kiev maintains export target of 20.2 million metric tonnes 
The government in Kiev has also agreed on an export target of 20.2 million metric tonnes, which could soon be exhausted. According to AKP information, Ukrainian wheat exports had increased to 319,000 metric tonnes in the week from 11 to 17 April, which is a plus of 47% compared to last week. In the current season Kiev exported 18.56 million metric tonnes of common wheat, a good 54.5% more than last year. The main customers were Egypt, Turkey and Spain. Now, in Western Europe, precipitation in Northeastern and Central France, Germany, Poland and the Baltic States is also missing and will slowly start to price in weather premiums, provided there is no rain. Small water surcharges could also soon threaten. This could mean that the coming wheat crop will start with high starting prices, which could possibly fall significantly later. The baking industry should keep an eye on this in flour contracts.

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