Nogger's Blog

10/05/12 -- EU grains finished mixed but mostly lower with May 12 London wheat ending up GBP0.25/tonne to GBP173.75/tonne, new crop Nov 12 was down GBP0.40/tonne to GBP148.50/tone. Expiring May 12 Paris wheat crashed EUR12.75/tonne to EUR215.75/tonne, whilst new crop Nov 12 was down EUR1.75/tonne to EUR195.50/tonne.

The last remaining old crop Paris contract staged another dramatically thin performance, reversing all of yesterday's equally off the wall EUR11.50/tonne gains and then some.

Today was all about the USDA who gave us their first 2012/13 world crop production estimates, along with both old crop and new crop ending stocks projections both in the US and around the world.

Essentially the reports were bullish soybeans (and thus rapeseed), bearish corn and somewhere in the middle for wheat.

For soybeans they cut 2011/12 US ending stocks by more than expected to 5.7 MMT and projected 2012/13 carryout even tighter at 3.9 MMT. US ending stocks have only been lower than this four times in the last forty years, and when the latter number is taken on a stocks to usage basis this is the tightest availability since the mid-1960's. Meanwhile insatiable China's 2011/12 soybean imports are seen rising 3.7 MMT to 56 MMT, and by a further 4 MMT to 61 MMT in 2012/13.

The USDA pegged the EU-27 rapeseed crop down almost 6% to 18 MMT this year. World and EU-27 rapeseed ending stocks are forecast at nine year lows in 2012/13. World stocks will slump 32% to 2.86 MMT – less than half of where they were two years ago. Europe’s stocks meanwhile will more than halve from where they are expected to be at the end of this season to just 675,000 MT.

They estimated that the UK will produce a marginally lower 2.7 MMT rapeseed crop this year, with French production also seen down a tad to 5.25 MMT. German output will recover 15% from last season's drought damaged crop to 4.45 MMT.

The world corn numbers were undeniably bearish, with US 2011/12 ending stocks increased to 21.6 MMT and those for 2012/13 seen more than doubling to 47.8 MMT. US production this year was pegged at a record in excess of 375 MMT, with world output also pegged at a record of almost 946 MMT - well above the ICG's current estimate 900 MMT.

For wheat they gave us a world crop of 677.6 MMT, which was very much in the ballpark of other estimates from the IGC (676 MMT) and the FAO (675 MMT). World ending stocks are seen declining by 9 MMT to 188 MMT in the coming season.

The EU-27 wheat crop will come in at 132 MMT this year, they said. That's a 4% drop on last year. In amongst that there was little change on last year for the three main protagonists, with a UK crop of 15.6 MMT, a French crop of 36.5 MMT and a German crop of 22.5 MMT.

Separately FranceAgriMer raised their estimates for wheat and corn 2011/12 ending stocks there due to domestic prices being too high to meet earlier export forecasts.