Nogger's Blog

19/01/12 -- EU grains finish mixed, although wheat was mostly higher, with Jan 12 London wheat up GBP0.75/tonne to GBP157.25/tonne and Mar 12 Paris wheat rising EUR1.00/tonne to EUR198.50/tonne.

London wheat still seems to be basking in the glory of last week's friendly export data for November. Today's bond auctions by France and Spain were well received by the market despite recent S&P's downgrades, allaying fears (even if only temporarily) over European debt.

What other fresh news was around today was largely bearish though. Some of it very bearish going forward into 2012/13.

The IGC raised their estimate on 2011 world wheat production by 7 MMT to 690 MMT, pegging 2011/12 ending stocks 4 MMT higher than last month at 204 MMT. World corn production and carryout were also increased by 8 MMT and 2 MMT respectively.

Despite reducing South American prospects because of drought and heat stress both Argentina and Brazil are still expected to produce record corn crops, they said.

Looking ahead world wheat plantings for the 2012 harvest are projected to expand by 1.7%, to 225 million hectares - the largest since 1998, they added.

Elsewhere, Strategie Grains issued their second forecast on 2012/13 grain production within the EU-27. They came up with a soft wheat crop estimate of 133.3 MMT up 3% from a year ago, and durum wheat production of 8.9 MMT up 6% from last year. That gives us an all wheat crop of 142.2 MMT versus the USDA's 2011 figure of 137.7 MMT.

Barley production is seen 5% higher in 2012 to 54.5 MMT.

Citing a sharp fall in demand from the animal feed sector they peg world 2012/13 ending stocks at a record 211 MMT next year, with those in the EU-27 climbing almost 20% to 15.8 MMT.

Ag Canada estimate the wheat area there this year at 24.2 million acres, up 12% on 2011. The Canadian barley area is seen leaping 21.5% to a record 7.9 million acres and rapeseed plantings are also forecast to be a record 19.8 million acres.