Nogger's Blog

27/03/12 -- EU grains finished mostly lower with May 12 London wheat ending down GBP3.10/tonne at GBP174.05/tonne, and May 12 Paris wheat falling EUR4.00/tonne to EUR213.25/tonne.

It was a day of consolidation after yesterday's sharp gains, with traders wary of what the USDA might throw at them on Friday.

For Mar 1st US wheat stocks the trade is expecting a figure of 1.255 million bushels.

For US plantings an all wheat area of 57.6 million acres is the average trade guess, with the range of guesses at 56.6-58.3 million, that's a bit lower than the 58 million the USDA suggested last month but still up almost 6% on last year's 54.4 million.

US crop conditions are also hugely better than they were this time last year with 75% of Oklahoma and 59% of Kansas wheat rated good/excellent. Mid-March last year only 22% of Oklahoma's and 25% of Kansas wheat was placed in the top two categories.

We should never underestimate the USDA's capacity for surprise. On the day of these reports last year March 1st stocks US corn stocks were below even the lowest trade estimate and corn closed limit up, with wheat 36 cents higher and soybeans up 38 1/4 cents.

In other news, the EU Commission's research unit MARS projected EU-27 2012 wheat yields at 5.41 MT/ha, a small increase on last year. Of note were ideas that the UK yield would average 4% more than in 2011 at 8.07 MT/ha, with those in France 7% higher at 7.11 MT/ha and Germany's up 7.5% to 7.57 MT/ha.

The largest decline in yields this year is seen coming from Romania, down 21%, with Ireland down 15% and Spain falling 14%.

EU-27 barley yields are forecast 2.6% higher this year at 4.41 MT/ha, with those in the UK at 5.82 MT/ha, up 2.7%. Rapeseed yields EU-wide are seen averaging 3.02 MT/ha, up 5.5% on last year, with the UK yield falling from a record 3.94 MT/ha to a more normal 3.5 MT/ha this time round.