April 24, 2013
EU wheat prices drop as Ukraine lifts export cap
Following Ukraine's confirmation that it could lift its cap on wheat exports for the remainder of the season, wheat prices in Western Europe dropped.
Front-month May milling wheat in Paris was down 0.6% at â‚¬242.25 (US$315) a tonne by 1140 GMT. New-crop benchmark November was down 1.1% at â‚¬210.50 (US$274).
Ukrainian Agriculture Minister Mykola Prysyazhnyuk told reporters Kiev was "ready to make the market free" and that the decision could be taken this week, allowing traders to ship abroad about 500,000 tonnes of the commodity.
Prysyazhnyuk had said last month that the issue would be discussed in April but that a decision would depend on the condition of the winter wheat crop, which accounts for more than 95% of Ukraine's total wheat output.
Russia had already revived exports of wheat from the Black Sea last week after sales from government grain stocks led to a price slide of about 18% since February, analysts said. The country could export a few hundred thousand tonnes of grain in the period from April to the end of the marketing year on June 30, SovEcon think-tank said.
Some West European traders pegged Russian wheat exports during that period at between 300,000 and 400,000 tonnes.
Prices in Britain and Germany were also lower with November feed wheat in London off 0.4% at Â£183.75 (US$281) a tonne. Standard milling wheat for April delivery in Hamburg was offered for sale down â‚¬2 (US$2.60) at â‚¬248 (US$323) a tonne with buyers at about â‚¬246 (US$320).
"Export demand seems to have cooled off and the main driver is internal demand both from flour mills and feed makers as US wheat appears cheapest on international markets," one German trader said.
Purchase interest from feed compounders kept feed wheat prices close to or above milling wheat in parts of Germany. Feed wheat for April-June delivery in the South Oldenburg market near the Netherlands was offered for sale down â‚¬3 (US$3.90) at â‚¬260 (US$338) a tonne with buyers at â‚¬259 (US$337) following trades of â‚¬263 (US$342) to a peak of â‚¬265 (US$345) spoken of on Monday (Apr 22).
Germany is forecast to be mostly dry up to Saturday (Apr 27) apart from some rain in the north and this is not positive for grain plants already well behind normal development and weakened by the long winter.