Asia Grains-Wheat buyers shy away from market as global prices rally

23.06.2017

Asian wheat millers largely stayed away from the market as world prices gained on the back of a rally in the benchmark U.S. futures in past two weeks following adverse weather in parts of the United States and Europe.

Most flour mills in the region are covered for supplies until August and are looking to buy some cargoes for September arrival, two Singapore-based traders said.

"It has been pretty quiet this week," said one of the traders who sells cargoes from the Black Sea region and Australia.

"Most of the large mills need to cover about a quarter of their supplies for September. But they are not chasing this rally."

The benchmark Chicago Board of Trade wheat futures have risen 8.3 percent in the last two weeks, although the market is down about 1 percent this week.

The wheat market climbed to multi-month highs earlier this week, with gains sparked by worries of low protein content in the winter wheat harvest, as farmers in the top-growing state of Kansas continued to gather their crop, and dryness in northern Plains.

A heatwave hitting France and southern Europe will damage this year's wheat crops, mainly in top EU producer France and in Spain, while rainfall benefited crops in Germany, Poland and Britain where they are expected to be higher, analysts said.

"Buyers are expecting prices to decline," the second Singapore trader said. "There are ample supplies from the previous year and the weather is expected to improve.

Both traders declined to be identified as they were not authorised to speak to media.

Much-needed rainfall is forecast in the coming days in the northern U.S. Plains, where spring wheat crop has been suffering from dry weather, while in France the extent of damage from extreme heat is unclear.

Wheat from Russia and Ukraine was quoted at $203-$204 a tonne including cost and freight (C&F) this week, up from shipments sold to Indonesia between $190 and $197 a tonne a few weeks ago.

Australian Premium White (APW) wheat is being offered at $250 a tonne C&F as compared with $238 a tonne a couple of weeks ago while Australian Standard White (ASW) wheat is quoted at $242 a tonne (C&F), up from $235 a tonne.


indiatimes

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