April 23, 2013 / 12:21 PM / 5 years ago

EU wheat eases on possible lifting of Ukraine export cap

LONDON, April 23 (Reuters) - Wheat prices in western Europe were lower on Tuesday after Ukraine confirmed it could lift its cap on wheat exports for the remainder of the season, providing additional competition for EU supplies in coming months.

* Front-month May milling wheat in Paris was down 0.6 percent at 242.25 euros a tonne by 1140 GMT. New-crop benchmark November was down 1.1 percent at 210.50 euros.

* 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 percent 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 percent 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.

* “The Ukrainian news is definitely bearish for grains,” one trader said.

* The news added to concern about slowing export demand.

* Prices in Britain and Germany were also lower with November feed wheat in London off 0.4 percent at 183.75 pounds a tonne.

* Standard milling wheat for April delivery in Hamburg was offered for sale down 2 euros at 248 euros a tonne with buyers at about 246 euros.

* “Export demand seems to have cooled off and the main driver is internal demand both from flour mills and feed makers as U.S. wheat appears cheapest on international markets,” one German trader said.

* “Both sectors seem to have old crop supply requirements and it is very difficult to assess how much German old crop wheat has been sold.”

* 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 three euros at 260 euros a tonne with buyers at 259 euros following trades of 263 to a peak of 265 euros spoken of on Monday.

* “Farmers are reluctant sellers of new crop wheat,” another trader said. “The winter at last ended last week but with temperatures back to normal levels plants now need rain in many areas of the country.”

* “Germany is forecast to be mostly dry up to Saturday 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.” (Reporting by Nigel Hunt in London, Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; editing by Keiron Henderson)

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