EU Grains Closing Comments - Wednesday

Posted by Nogger - a legend in his own mind at 19:27 | Categorized as

22/08/12 -- EU grains ended mixed, Nov 12 London wheat was up GBP0.35/tonne to close at GBP206.85/tonne and Nov 12 Paris wheat EUR1.00/tonne lower at EUR266.75/tonne.

Nov 12 London wheat was higher for the seventh successive day on continued reports of serious yield and quality issues with this season's crop as the harvest progresses. There's talk of feed manufacturers having to lower their standards, albeit at a price, as far as minimum bushel weights are concerned this year.

There's also some debate as to where enough wheat of sufficient quality is going to come from to make delivery against futures sales, should that be what shorts were intending to do. There's also the inevitable discussion about grower defaults amongst those with a large percentage of their anticipated 2012 crop already sold should their yields fall well short of expectations.

May 12 London feed wheat is now more expensive than May 12 Paris milling wheat.

The German Farmers' Association (DBV) pegged the grain crop there at 43.8 MMT this year, up almost 5% on last year's harvest, largely thanks to increased barley production. Winter wheat production is seen at 21.0 MMT, with spring wheat output responsible for a further 0.9 MMT to give an all wheat crop of 21.9 MMT. That's 4% down on last year,  600 TMT lower than the USDA currently say and 1.5 MMT below last week's Strategie Grains estimate.

They said that "massive winterkill" reduced the winter wheat acreage by almost 9 percent, leading to a sharp increase in spring barley plantings, up 40 percent this year to 590,000 hectares. That helps bring the German 2012 barley crop in at an estimated 9.8 MMT, some 12% up on last year and 580 TMT more than the USDA currently suggest.

German rapeseed production this year will come in at 4.4 MMT, according to DBV. That marks an increase of 15% on an "extremely difficult" 2011 output, but is fully half a million tonnes less than the USDA forecast. Wet conditions in the autumn of 2011 hindered plantings, keeping the area sown down to around 1.3 million hectares. The quality of this year's crop is "good, sometimes very good" with oil contents of 40 to 46 percent, they add.

StatsCanada estimated the all wheat crop there at 27.0 MMT, exactly in line with the average trade idea, and the USDA, and up almost 7% on last year. Barley production is forecast higher than trade estimates at 9.5 MMT, which is up also 1 MMT more than the USDA predict and almost 22% higher than in 2011. This year's rapeseed crop was estimated 1 MMT below trade forecasts at 15.4 MMT, although still nearly 9% up on year ago levels.