EU Wheat Mixed, Weighed Down By Much Cheaper Corn

31/10/13 -- EU grains closed mixed. Downside pressure came from news that US wheat exports across the last 3 weeks failed to meet up to expectations.

The session ended with Nov 13 London wheat down GBP0.40/tonne to GBP164.50/tonne, Nov 13 Paris wheat EUR2.25/tonne firmer at EUR204.00/tonne, Nov 13 Paris corn EUR3.25/tonne lower at EUR165.00/tonne and expiring Nov 13 Paris rapeseed up EUR6.00/tonne, going off the board at EUR373.75/tonne.

You will note there the significant price difference between French corn and wheat - 24%, across the pond the premium that Chicago wheat currently commands over corn is in excess of 50%.

The USDA issued 3 weeks worth of export sales data today, to bring them back up to speed to where they should have been without the shut-down. The trade was expecting wheat sales of 1.5-2.0 MMT across the past 3 weeks, but instead only got sales of 1.31 MMT. Corn sales on the other hand beat expectations of 2.0-2.5 MMT coming in at 4.56 MMT for the 2013/14 marketing year.

Customs figures out of the leading French grain export hub of Roeun showed exports 36% down on last week at only 96.1 TMT, of which 86.4 TMT was soft wheat. If it hadn't have been for Algeria taking 75.5 TMT of the latter then it would have been a very lean week indeed.

Late in the day though, Brussels confirmed that they'd issued 561 TMT of soft wheat export licences this past week. That takes the marketing year to date total to 9.0 MMT versus 5.3 MMT this time a year ago.

Russia's grain harvest is 92.5% complete at 90.8 MMT in bunker weight, including 53.6 MMT of wheat (off 96.8% of plan), 15.8 MMT of barley (off 91.7%) and 6.5 MMT of corn (off 50.8%).

The USDA's FAS Moscow office lowered their grain production estimate in the country from 90 MMT to 88.5 MMT in clean weight. Wheat output was cut from 53 MMT to 51.5 MMT, although still 36.6% higher than last year. Barley production was trimmed from 16 MMT to 15.2 MMT, whilst corn output was raised from 9 MMT to 9.7 MMT.

The Interfax News Agency said that winter wheat plantings in the Volgograd region were complete at 1.12 million hectares, around 19% lower than last year. Nationally the Ag Ministry say that winter grain plantings are done on 85.8% of the initial target, or 14 million hectares.

The Ukraine Ministry lowered their forecast for winter grains that will go unplanted this year from 1.1-1.2 million hectares to 0.4-0.5 million due to significant weather improvements in recent weeks.

The Kazakh grain harvest is 97% complete at 20.5 MMT in bunker weight, and should amount to around 18.5-19.0 MMT in clean weight versus 12.8 MMT a year ago, say the local Ag Ministry.

Defra said that the English wheat area fell 19% to just over 1.5 million hectares for the 2013 harvest, a 30 year low. The total barley area rose 33% to 828k ha, despite a 22% drop on the winter planted area, thanks to a 94% rise in the spring planted area, they said. The English oat area was up 50% to 138k ha, and the spring OSR area rose by more than 750%, they added.

The Turkish Stats Office said that grain production there was up by 12% to 37.5 MMT in 2013, including a 10% rise in wheat output to 22.1 MMT.