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Wheat: Brazil's mills on import course

April 6, 2020 12:23 PM, Der AUDITOR
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FRANKFURT. The wheat markets in the USA began this with significant price increases, while the price level in Western Europe and on the Black Sea remained at last week's level. Brazil is unable to cover its import enquiries from Argentina for logistical reasons and is therefore looking for goods in other countries. Wheat exports in Western Europe flattened out somewhat and uncertainty about the further course of the market remains high. The industry must prepare for longer restrictions due to the Covid19 pandemic.

The wheat markets started this week with firmer guidelines from the USA. At USD 5.59 per bushel, wheat in the CME recorded an increase of 1.8%. In Paris, wheat increased slightly by 0.1% to EUR 191 per metric tonne, while the May deadline on the Black Sea remained at USD 220 per metric tonne. The US trade justifies the rise in the share price with the worldwide increase in stocks of pasta and other long-life pasta, the industry is preparing for longer-term restrictions and higher supply risks due to logistics problems. The number of people infected with Covid-19 had soared to almost 1.278 million globally, with the number rising to 337,646 in the USA alone. Brazil also provided firmer price impetus for wheat. Brazil traditionally has to cover 60% of its wheat enquiries through imports. Neighboring wheat exporter Argentina is unable to supply due to logistical problems. Transports and shipments in the export port of Rosario have recently come to a standstill due to the pandemic.

Wheat, daily price development

Quality wheat (13/250/76)

Parity

EUR/mt

Diff. EUR/mt

Hamburg, DDP

200.00

0.00

Baltic Sea, FOB

200.00

0.00

Milling wheat (12/220/76)

Parity

EUR/mt

Diff. EUR/mt

Rouen, FOB

188.00

0.00

La Pallice, FOB

188.00

0.00

Creil, FOB

181.00

0.00

Hamburg, DDP

197.00

-1.00

Westphalia, DDP

195.00

0.00

Rhineland, DDP

193.00

0.00

Upper Rhine Region, FOB

190.00

0.00

Feed wheat (72/73)

Parity

EUR/mt

Diff. EUR/mt

Netherlands, CIF

195.00

0.00

South Oldenburg, DDP

196.00

0.00

Westphalia, DDP

195.00

0.00

Neuss, DDP

190.00

0.00

Upper Rhine Region, FOB

187.00

0.00

Trade sources

Brazilian mills are therefore urging the government to lift the restrictions on Russian wheat and temporarily suspend the current 10% import duty on wheat imports outside the Mercosur block. Brazil's import needs are estimated by trade at 7.7 million metric tonnes. US exporters are hoping to benefit from Russia's export restrictions on their wheat sales and export more wheat to Brazil. The development of wheat prices in Western Europe continued to be supported by sustained demand at the export ports in France, Northern Germany and Poland. Wheat is expected to become scarce in Northern Germany, but freight to Southern Germany has so far been only partially profitable. France's trade was recently irritated by an Algerian wheat tender for July, which is said to be USD 15 per metric tonne lower than the last traded tender. Demand from local mills and concentrated feed plants declined somewhat before Easter. The uncertainty about the further market development remains high, the local trade said.

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