EU Wheat Falls On Improved US Weather Forecast

Posted by Nogger - a legend in his own mind at 19:18 | Categorized as

28/08/13 -- EU grains were mostly lower, following a change in the latest US weather forecast to a cooler and wetter outlook for next week.

At the close Nov 13 London wheat was GBP1.60/tonne firmer at GBP159.60/tonne and Jan 14 was down GBP1.95/tonne at GBP161.50/tonne. Nov 13 Paris wheat finished the day EUR2.50/tonne easier at EUR189.25/tonne (around GBP162.50/tonne equivalent).

Toepfer trimmed slightly it's forecast for German wheat and OSR production, with wheat output cut from 24.24 MMT to 24.18 MMT and OSR from 6.04 MMT to 5.83 MMT. Even so, that still leaves wheat production up 8.3% on last year and OSR output almost 21% higher. This year's harvest is almost done and quality is "normal" they said. OSR oil levels are averaging around 42-43%, they added.

Russia's grain harvest now stands at 58.8 MMT off 52% of the cultivated area. Wheat accounts for 38.8 MMT of that, more than last year's output even though the harvest is only just past halfway at 54% done. Wheat yields are up more than 42% versus a year ago. They've also harvested 11.4 MMT of barley so far off 60.6% of plan.

Rusagrotrans estimate this year's grain crop at 91.6-92.8 MMT, with wheat accounting for 52.6-53.0 MMT of the total, barley a further 15.6-15.7 MMT and corn an additional 9.8 MMT. They have grain exports at 20-22 MMT, including 15-16 MMT of wheat, 2.5-3.0 MMT of corn and 2 MMT of barley.

The Siberian presidential envoy is bullish on crop production prospects there following decent rains (which have delayed the harvest by 2-3 weeks). "I think that the harvest will be close to a record, above average that's for sure," he is quoted as saying.

Rusagrotrans noted that September grain exports will drop to 2.6-2.8 MMT, from 3.1 MMT in August, as the country struggles to match cheap offers out of the Black Sea.

Ukraine has exported 3.23 MMT of grain since the start of the 2013/14 marketing year (to Aug 27), up 16.2% versus a year ago. Wheat accounts for 1.5 MMT of that, along with 1.5 MMT of barley and 0.56 MMT or corn, according to Ministry data.

Egypt are back in the market tendering for wheat, with the results expected later today. News wires suggest that the cheapest French wheat offers were around USD20/tonne more expensive than those out of Ukraine. They've bought 1.08 MMT of Ukraine, Romanian and Russian wheat in their last five tenders since they resumed buying again following a 5 month break.

Tensions in Syria are also fresh in trader’s minds with Brent crude rising to a 6 month high and NYMEX crude up to levels not seen since May 2011. A Senior US official told NBC News "we're past the point of return" and that US air strikes against Syrian targets appear inevitable."within days."

Spain imported less than 4 MMT of wheat in 2012/13, according to the latest customs data. That's down 35% from 2011/12. Soft wheat imports were down from 5.5 MMT to 3.6 MMT, and should fall further in 2013/14 due to bumper domestic production.

Ukraine said that farmers there have already planted 30% of the 2014 winter rapeseed crop. The local weather centre said that good rains in the forecast for the next few week will get winter sown crops off to a good start. The latest GFS model gives 150-300% of normal rainfall for almost the entire country in the next 14 days.

Tunisia bought 84,000 tonnes of soft milling wheat yesterday morning on an optional origin basis for September through November shipment.