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Frontrunner - 5th March 2021

World wheat markets have slipped this week. A lack of fresh bullish features has led to spells of profit taking from speculative buyers who still carry significant long positions in grain futures markets. US weekly wheat export shipments and sales were particularly disappointing. However, the weekly export pace from the EU was far more encouraging. Wheat shipments for last week were one million tonnes, taking the total now shipped to over 17.5 million tonnes.

Analysts estimate the EU, including the UK, will ship just over 26 million tonnes. This will leave end June stocks extremely tight at around ten million tonnes. Last season from the beginning of March to the end of June, the EU shipped over 13 million tonnes during a period when there were no Russian export taxes and therefore stronger competition. However, this week, the world’s major importers, Egypt, Algeria and Saudi Arabia, have again been absent from the market, leading to concerns for export demand for the remainder of the season and adding to market weakness. Remaining old crop supplies may be tight but carry a $40-50/t price premium to new crop. Perhaps importers will target cheaper new crop supplies if they have sufficient stocks to wait until they are available.

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