EU Wheat Mixed To Start The Week

14/10/13 -- EU grains closed mixed to start the week with Nov 13 London wheat settling GBP0.50/tonne lower at GBP162.50/tonne, whilst Jan 14 was unchanged at GBP163.75/tonne. Nov 13 Paris milling wheat settled down EUR0.50/tonne to close at EUR198.75/tonne. Nov 13 Paris rapeseed was up EUR0.75/tonne at EUR373.50/tonne.

London wheat gained more than any other commodity in the grains sector last week, up 2.68%, comfortably eclipsing Paris wheat (up 2.44%), Minneapolis wheat (up 1.14%) and Chicago wheat (up 0.76%), so it was maybe time to give up a bit of those gains.

Last week's rise seem to be down to short covering, and the fact that maybe there isn't actually that much UK feed wheat around, now that the rubbish left over from last year has largely been blended away. Much more of this year's crop has made milling standard than a year ago, even if the final production number of 12.1 MMT (according to Defra today) was down 9% on last year's output, and the smallest wheat crop since 2001. The 2013 UK barley crop meanwhile came in 29% higher than last year at 7.1 MMT - the biggest year since 1997 - they added.

The Czech Stats Office reported that grain output there this year was up 22% from 5.645 MMT in 2012 to 6.898 MMT in 2013. That was helped along by wheat yields up 32%, barley yields up 10% and OSR yields 25% higher.

The Ukraine grain harvest now stands at 44.5 MMT off 81% of plan. Corn production now accounts for more than 10 MMT of that total. Winter grain plantings in Ukraine have moved on very well in the past fortnight now that the weather has turned drier. It remains to be seen however how well the crop germinates and becomes established ahead of winter dormancy.

Ukraine grain exports this past week have also picked up, to total 580 TMT, versus 458.3 TMT the week before. Wheat accounted for 415.6 TMT of that, along with 152.1 TMT of corn.

That means that they exported more grains than Russia's 380.5 TMT in the past week (incl 265.1 TMT of wheat).

Russia are expected to begin buying grain for their depleted intervention fund tomorrow.

The FAO estimated the Russian grain harvest at 87.4 MMT versus 69.6 MMT last year. Wheat will account for 51.5 MMT of that versus 37.7 MMT in 2012, they said. Grain exports in 2013/14 will rise to 20 MMT versus 15 MMT in 2012/13, they added.

Kazakhstan has now harvested 19.83 MMT of it's 2013 grain harvest off 95% of the planned area. They expect to harvest 20 MMT in bunker weight versus 12.8 MMT in clean weight last year.

Morocco is tendering to buy 330,000 tonnes of wheat from the EU. Iraq, Bangladesh and Jordan are also tendering for optional origin wheat on the international stage.

Australia's wheat crop seems to be getting bigger. Yields are said to be much better than last year, although proteins may be a problem.