EU Wheat Stumbles To Fresh One Year Lows

10/06/13 -- EU grains slumped lower across the board on follow through selling from last week and competition from the Black Sea heats up. US grains offered no support on profit-taking and book-squaring ahead of tonight's planting progress and crop condition report, and Wednesday's global supply and demand numbers from the USDA.

Jul 13 London wheat finishing the day GBP2.50tonne easier at GBP171.50/tonne and Nov 13 ending GBP2.75/tonne weaker at GBP172.50/tonne. Nov 13 Paris wheat settled EUR2.25/tonne down at EUR201.50/tonne. New crop Paris milling wheat is the equivalent of around GBP1.00/tonne cheaper than London feed wheat  based on tonight's close.

The Black Sea harvest gets closer every day, the Ukraine Ministry said on Friday that they expect the 2013 campaign to be underway within 10-15 days. They estimate this year's grain crop at 53-54 MMT, up 15-17% on last year.

The Russian harvest will also begin within weeks, and both countries will be eager to make up for lost time and hit the export ground running. Russia has only exported 619 TMT of wheat in the first four months of 2013 versus 4.5 MMT in the same period in 2012.

Iraq announced today that it had bought 250 TMT of new crop Russian wheat in a recent tender at prices said to be around USD50/tonne cheaper than the US equivalent. They immediately issued a fresh 50,000 MT tender, although they usually buy more, which closes June 23rd. Russia’s Ag Ministry estimate the 2013/14 grain crop at 95.0 MMT, up almost 33% on last season's 77.2 MMT.

North Africa's big wheat homes look likely to be much smaller net purchasers this year. The Moroccan Ag Ministry confirmed that they are expecting a record grain crop of 9.7 MMT this year, up 90% versus 2012, and that imports in 2013/14 will halve. Algeria are also said to be in for a bumper harvest this year, although Tunisia's grain crop is expected to fall from 2.2 MMT in 2012/13 to around 1.4-1.5 MMT, necessitating increased imports. Egypt remain absent from the market.

Iran bought 60,000 MT of feed wheat overnight from the Black Sea.

French soft wheat exports in April were up 29% on year ago levels at 1.53 MMT, with barley shipments rising 53% to 531 TMT and corn exports up 6% to 566 TMT Cumulative Jul/Apr soft wheat exports are now 14.64 MMT versus a full season estimate of 17.05 MMT from FranceAgriMer.

The latter tweaked their planted area estimates for the 2013 harvest today, estimating the soft wheat area up 2.9% on last year to 5.0 million hectares, with corn plantings up 2.4% to 1.71 million ha and the nation's barley area down 5.4% to 1.59 million ha. A week of warm and dry weather should see crop conditions improve when FranceAgriMer release their next set of ratings at the end of the week.

Spanish Farmers' Association Asaja said that wet and cooler than normal weather earlier in the year will cut their grain production levels below those forecast by the Ministry and USDA. They estimate the all wheat crop there at 5.8 MMT versus the Ministry's 6.6 MMT and the USDA's 7.1 MMT. They peg the 2013/14 Spanish barley crop at 6.8 MMT, compared with 7.0 MMT from the government and 8.4 MMT from the USDA.

Oil World trimmed their 2013/14 global rapeseed production estimate slightly, although at 63.5 MMT that's still a record crop. Production in the EU is forecast up from 19.0 MMT in 2012/13 to 19.7 MMT in 2013/14, whilst Canadian output will rise from 13.9 MMT to 14.5 MMT, they said. Canadian canola futures slumped 4% last week as the outlook for bumper production in 2013/14 improved. Prices in Paris also declined by more than EUR10/tonne last week.