Romania succumb to EU pressure overnight and removed the current export ban for wheat to non-EU ports. This would no doubt make “some of the greedy grain traders” happy but also added a more bearish tone to the US futures market resulting in some slippage in US futures. Interesting to note that Paris milling wheat futures did not slip, in fact nearby futures were higher by E1.75 per tonne to close at E196.50. New crop Paris wheat was a touch higher but still trading at about a E10 discount to the nearby.
The Romanian about face should also put a smile on the face of the Middle East importer, the more sellers in the Black Sea region the better it is for them.
As expected Egypt walked away from US wheat offers in their latest tender, instead picking up Russian and French wheat. This is the reason we saw Paris milling wheat futures rally while Chicago fell away. News that Egypt had picked up 180kt of French wheat had the Paris contract up as much as E3.25 early in the session before slipping away a little towards the close.
Russia filled out the balance of the 240kt purchase. The punters expect to see more EU wheat and less Black Sea wheat in future Middle East business, at least until the FSU states can get some wheat in the bin.
Conditions have improved a little across the central north Russian wheat area but remain dry in the south across the lower Volga Valley and around the Black Sea rim. To the west Ukraine is also very dry and in need of rain if they are to see better yields in winter wheat.
Much of Europe is also dry and we may start to see further reductions in their production estimates over the next week or two.