August 19, 2010 / 2:48 PM / 9 years ago

GRAINS-Wheat jumps on Russia import prospects, USDA report

 * Russia seen turning to grain imports after drought
 * Russian agministry denies discussing import plans
 * U.S. weekly export wheat sales above expectations
 
 (Updates with USDA export sales report)
 By Svetlana Kovalyova
 MILAN, Aug 19 (Reuters) - U.S. and European wheat futures
jumped on Thursday spurred by expectations of hefty grain
imports from drought-hit Russia and stronger than expected U.S.
wheat export sales weekly figures in the U.S. government data.
 European milling wheat futures rose sharply, with the
benchmark November contract BL2X0 on Euronext up 10.00 euros
or 4.87 percent at 215.50 euros by 1425 GMT, accelerating higher
on the back of strong pre-opening gains in the U.S. futures.
 Chicago Board of Trade (CBOT) wheat for September delivery
WUO was up 3.32 percent at $6.77-3/4 a bushel after the U.S.
Department of Agriculture report showed export sales of U.S.
wheat last week came in at 1,412,500 tonnes, above estimates for
950,000 to 1,250,000 tonnes [ID:nN19323321]
 "The U.S. exports are tremendous for them, they are well
above people's expectations," Gauthier Le Molgat of French grain
analysts Agritel said. "They (the Americans) are realising how
much export demand there is."
 Gains in Paris were also fuelled by a tender by Egypt, which
has turned away from Black Sea wheat to buy Canadian and French
wheat amid an export freeze in Russia. [ID:nLDE67I14X]
 "First we can see that Russia is in a very bad situation
(requiring imports). Now we have the U.S. exports and people are
expecting a rise in Chicago," Agritel's Le Molgat said.
 RUSSIA'S IMPORTS
 Analysts estimate that Russia, usually a major grain
exporter, will have to import 1.5-2.2 millions of tonnes of
grain for the first time in more than 10 years after its worst
drought in over a century, despite a denial of such plans from
the Agriculture Ministry. [ID:nLDE67I11E] 
 A report in Vedomosti daily said Russia's need could be even
greater and the Black Sea country could import at least 5
million tonnes of grain this year.  [ID:nLDE67I0H9]
 "We've seen a rapid expansion in recent years in Russia's
livestock industry and the concern there was that potentially
you could see Russia turning to the import market and that does
seem to be the case now," Sudakshina Unnikrishnan, analyst at
Barclays Capital said.
 Imports were most likely to come from neighbouring countries
including Ukraine and Kazakhstan, Unnikrishnan said.
 Kazakhstan said on Thursday Russia will be among its main
export markets with 2 million tonnes of grain exports earmarked
for Russia, Iran and other countries out of total 8 million
tonne grain exports expected in the current marketing year.
[ID:nLDE67I0OS]
 "We are likely to see a shift in terms of trade flows so a
lot of the exports that were coming out of the former Soviet
Union countries for wheat are now going to have to be met by
countries like Australia, Argentina and the US," Unnikrishnan
said.
 Helping U.S corn futures was UDSA report which showed net
export sales of U.S. corn last week were the largest in nearly
16 years [ID:nN19251538].
 * Prices as of 1423 GMT
 Product             Last    Change   Pct Move End 2009 Ytd Pct
 Paris wheat         215.50    10.25    +4.99   131.25    64.19
 London wheat        151.00     4.50    +3.07   106.50    41.78
 Paris maize         193.75     7.50    +4.03   135.00    43.52
 Paris rapeseed      374.00     1.25    +0.34   287.50    30.09
 CBOT wheat          677.75    21.75    +3.32   541.50    25.16
 CBOT corn           421.00     2.50    +0.60   414.50     1.57
 CBOT soybeans      1040.25     5.00    +0.48  1039.75     0.05
 CBOT rice            10.89     0.14    +1.29    14.57   -25.26
 Crude oil            74.60    -0.82    -1.09    79.36    -6.00
 Euro/dlr              1.29     0.00    +0.16     1.43   -10.06
* CBOT contracts in cents per bushel except rice which is in
dollars per hundredweight. Paris wheat in euros a tonne and
London wheat in pounds per tonne
  (Reporting by Svetlana Kovalyova in Milan, Gus Trompiz in
Paris, Sarah McFarlane in London; editing by Keiron Henderson))


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