Nogger's Blog

02/04/12 -- EU grains finished mixed with May 12 London wheat ending down GBP1.00/tonne at GBP173.75/tonne, and May 12 Paris wheat ending EUR0.25/tonne higher to EUR213.00/tonne.

Ideas that Friday's gains were overdone saw London wheat edge lower, especially after Chicago came in around 10 cents weaker in afternoon trade. Rapeseed on the other hand was sharply higher in line with strong gains in Chicago soybeans.

The IGC increased their forecast for this season's 2011/12 world wheat crop by 1 MMT to 696 MMT, but cut carryout slightly although to a still very healthy 210 MMT. The outlook for next season is not quite so rosy though they project, estimating production 15 MMT lower at 681 MMT, with ending stocks reducing slightly to 208 MMT.

World corn production in 2012/13 will rise to an unprecedented 900 MMT, they said. That's a 4% increase on this season, and a huge 100 MMT more than was produced just four seasons previously - even so "the supply and demand outlook for corn is projected to remain quite tight in 2012/13," they added. Carryout for 2011/12 was cut 4 MMT from last month to a spartan 122 MMT, with ending stocks next season only seen recovering a little to 129 MMT.

The USDA resume their regular weekly crop progress report tonight, which the trade expects to show US corn planting at 6-8% complete and 58-60% good to excellent winter wheat condition ratings versus only 37% a year ago.

The HGCA say that UK spring planting is well ahead of normal due to the recent favourable weather conditions. Over 80% of spring barley is now drilled, compared to 50% normally. Dry conditions are not yet said to be adversely affecting crops, they add.

The UK, France and Germany are set for light showers to locally moderate precipitation over the next few days. Spain is in for scattered to widely scattered showers and thundershowers today through to Wednesday.

Production prospects are however getting trimmed on the Continent with Coceral last week pegging EU-27 all wheat output at 134.6 MMT, almost 3 MMT less than in 2011. The Spanish all wheat crop is seen 29% lower, accounting for 2 MMT of that loss.

The EU-27 barley crop will come in at 54.0 MMT this year, an increase of 4% aided by increased spring plantings, with corn production falling 4% to 62.0 MMT despite a larger planted area, they add.

Coceral peg the EU-27 rapeseed harvest slightly higher than last year at just over 19 MMT, as opposed to last year's crop which was just under. Despite a higher planted area a return to more normal yields should see the UK produce a crop of around 2.6 MMT, they predict. Germany's crop is forecast almost 1 MMT higher than last year at 4.8 MMT, with French output unchanged.

"The weather pattern is undergoing a major change in the United States and around the Northern Hemisphere, as the jet stream ridges and trough become realigned. Weekend weather in the Midwest turned sharply cooler across the Great Lakes region as maximum temperatures Saturday fell into the 40s-50s F. A few northern Great Lakes growing areas even reported frost. The sudden cooling was a sharp reversal from predominant warmth in March when temperatures were 15-25 F above normal," say Martell Crop Projections.

"Northern Europe now faces a much colder forecast. March was incredibly warm with a dominant ridge of high pressure. Now a cold trough is developing. The Russia weather has turned suddenly warm in the Volga and Black Earth districts, causing rapidly melting snow and standing water in frozen fields. We still anticipate a delayed spring grain planting campaign in the spring grain belt from sodden fields," they add.

Russia's Ag Ministry have announced that they are to start selling 2 MMT of intervention grain stocks in Southern, North-West and North Caucasus regions this week to keep a lid on prices and replenish stocks there.

Kazakhstan's Ag Ministry say that their 2012 grain harvest is likely to fall 44% to 15 MMT (from almost 27 MMT in 2011) due to adverse weather conditions.