EU Grains Generally Higher

24/09/13 -- EU grains closed mixed but generally higher, with Nov 13 London wheat settling GBP1.00/tonne firmer at EUR153.00/tonne and Jan 14 up GBP0.70/tonne at GBP155.15/tonne. Nov 13 Paris milling wheat rose EUR0.50/tonne to EUR187.50/tonne whilst Nov 13 Paris rapeseed was EUR0.50/tonne higher at EUR362.50tonne.

Seasonal indicators point higher on wheat, but a record world corn crop undermines its upside potential. Corn hasn't yet broken out of its downtrend.

So sideways trade continues, although giving the impression that the wheat market is bouncing along the bottom. Drier weather is in the forecast for the Black Sea region, which is expected to allow for advancement in winter wheat planting progress and corn harvesting after a prolonged period of rain.

Production prospects in Kazakhstan appear to have improved significantly in recent weeks. The Kazakh Ministry now forecast a domestic grain crop of 18.5 MMT, up nearly 45% on last year. They've now harvested 14.56 MMT of grains off 73.6% of the planned area. Yields are up 41.6% at 1.26 MT/ha.

The Russian grain harvest is plodding along. Heavy rains in Siberia are disrupting progress, but yields are doing well, similarly to neighbouring Kazakhstan. The Russian wheat harvest now stands at 45.9 MMT off 73.9% of plan, with yields up by a third on last year at 2.47 MT/ha.

The Russian Ag Ministry have this year's grain harvest at 88-90 MMT, up around 23-25% on last year.

The Russian Ministry also say that they will begin buying for the state intervention fund in early October. They are expected to purchase 2-3 MMT of grains by the end of the year, and 5-6 MMT in the whole of 2013/14.

They've exported 1.855 MMT of grains this month so far, to Sep 18, including 1.6 MMT of wheat, 179 TMT of barley and 59 TMT of corn. That brings the total 2013/14 marketing year exports to 7.87 MMT, up 14.2% versus 12 months ago, and around half of the full 2012/13 season total less than three months into the campaign.

Ukraine's grain harvest meanwhile now stands at over 35 MMT off 71% of plan, as the corn harvest progresses. The Ag Ministry have this year's harvest at 53-54 MMT, up around 15-17% on last year.

Ukraine's Ag Ministry estimated Ukraine’s September grain exports at 2.5-2.6 MMT versus 2.46 MMT in August. They estimated Ukraine’s 2013/14 grain exports at 26-30 MMT versus 23.0 MMT in 2012/13.

Volume in the FSU clearly isn't going to be a problem this year, even if quality might be.

Volume is also well up closer to home in Spain. The Spanish Ag Ministry say that they've harvested 6.4 MMT of soft wheat this year, up from a previous estimate of 6.0 MMT and 36% higher than last year.

Tunisia bought 59 TMT of optional origin durum wheat for Oct–Nov shipment in a tender.