EU Wheat Closing Comments - Tuesday

28/08/12 -- EU grains were mixed with Nov 12 London wheat down GBP0.45/tonne to GBP203.25/tonne and Nov 12 Paris wheat EUR0.50/tonne higher to EUR260.75/tonne. The long 2013 new crop  London wheat posted gains of GBP4.35/tonne on ideas that at not much more than GBP170.00/tonne it is too cheap, although Nov 13 still remains at a substantial discount in excess of GBP30.00/tonne to Nov 12.

European jitters are to the forefront again on reports that Spain's Catalonia region said that it needs a major financial rescue from Madrid, amidst suggestions that the Spanish government itself will also soon require a sovereign bailout.

The G20's Agricultural Market Information System body, or AMIS, that has been set up to monitor rising world grain and oilseed prices says that the current situation is "worrying" but not yet a threat to global food security. The French, who chair the body, said that the G20 will wait until after the September USDA crop report before making a decision on any possible food price action.

The South Korean President last week asked G20 leaders to modify their biofuel policies "to cushion supply shocks."

Ukraine's Ag Ministry says that the country has exported 1.54 MMT of grains so far this month, bringing the marketing year-to-date total to 2.7 MMT, up 82.6% on this time last year when early season exports were particularly sluggish. Wheat accounts for 1.17 MMT and corn for 1 MMT of total exports so far.

Kazakhstan says that the harvest there is 40.6% done producing 4.7 MMT of grain to date. Yields of just 0.74 MT/ha are down 46% on last year's 1.37 MT/ha at this time. The Ministry say that the final harvest volume will total 13 MMT, less than half of last year's total.

Russian analysts IKAR have cut their domestic wheat production forecast to 40 MMT versus 56.2 MMT in 2011, although slightly better than SovEcon's 39 MMT estimate of last week.

The EU Commission's MARS unit peg EU-27 soft wheat yields "average" at 5.57 MT/ha this year, versus 5.59 MT/ha last year and the 5-year avg of 5.57 MT/ha. Barley yields are forecast likewise, at 4.32 MT/ha versus 4.31 MT/ha last year and the 5-year avg of 4.36 MT/ha.

Corn yields however will slump to 6.28 MT/ha versus 7.62 MT/ha last year and the 5-year avg of 6.94 MT/ha, led by a sharp drop from Romania, Bulgaria and Hungary, they add.

In the UK, wheat yields are forecast to average at an ambitious looking 7.82 MT/ha, with barley yields coming in at 5.66 MT/ha (winter barley 6.33 MT/ha and spring barley 5.28 MT/ha).

Oilseed rape yields in Europe are seen very close to the 5-year average at 3.01 MT/ha, led by a sharp rebound of 21.8% higher in Germany. UK yields are forecast 15.7% lower than last season's record at a tad below average 3.32 MT/ha.