EU Wheat Mostly Higher Ahead Of USDA Report

09/10/12 -- EU wheat closed mixed but mostly higher on the day with Nov 12 London wheat up GBP0.10/tonne to GBP201.75/tonne and Nov 12 Paris wheat EUR1.50/tonne firmer at EUR261.25/tonne.

The trade is in a state of limbo ahead of Thursday's USDA report. Lower 2012/13 world corn and wheat ending stocks are what the trade is anticipating. We will have to wait another couple of days to see if that is what we get.

It seems that Black Sea production and export prospects are getting fine tuned, and that foreign sales will be heavily stacked in favour of the front end. This isn't especially a surprise for anybody, but it is interesting to get some numbers put on these things.

Ukraine says that it has exported 6 MMT of grains so far in 2012/13, up 60% on year ago levels. That includes 3 MMT of wheat, 1.54 MMT of corn and 1.33 MMT of barley.

The 2012 harvest currently stands at 36.3 MMT, off 85% of the planned area. The Ministry say that they will have a final grain crop of 46.0-46.5 MMT versus 56.7 MMT in 2011.

IKAR have placed the Russian wheat crop this year at 37.5-38.5 MMT, towards the lower end of other trade forecasts. Russia’s Ag Minister estimated Russia’s 2012 grain crop at 71.0 MMT versus the Ag Ministry estimate of 72-73 MMT and the Economic Ministry estimate of 73-75 MMT.

The Russian government have confirmed that the will begin selling off 110TMT/week of their intervention grain stocks on the domestic market in an effort to contain rising domestic prices.

Kazakhstan said that the grain harvest there now amounts to 14.3 MMT in bunker weight off 98.9% of planned area. Yields are just 0.94 MT/ha, down 43% from last year's 1.66 MT/ha.

The Indian government have confirmed yesterday's rumours that they are to release a further 5 MMT of domestic state-owned wheat stocks onto the market, for both local use and export. A significant proportion of that may be headed for Iraq, so trade rumours suggest.