EU Grains Lower On Improved French And German Crops
Wheat prices faltered on better production prospects in France and Germany based on early harvest results and reports on Reuters of a Russian government source saying that the wheat crop there could still come in at 50 MMT versus the 45 MMT that the trade currently seems to have factored in.
That would still give Russia a wheat exportable surplus in the region of 11-15 MMT. A wheat crop of 50 MMT would only be not much more than a 10% decline from last year's crop, and a much better result than the trade is expecting. Unnamed Russian officials though are hardly the most reliable source of information.
A Russian government meeting to discuss the grain market is still scheduled for next week. Despite what is expected to be sharply lower output in 2012 they have still begun the new season as fairly aggressive sellers. The government may be pondering a way of curbing that enthusiasm without going the whole hog and introducing an outright export ban.
From a more reliable source, the French Farm Ministry upped it's forecast for soft wheat production there by a hefty 1.6 MMT to 36.7 MMT, some 8% up on last year. Wet weather since April has been favourable for yields, they said. They did however note that question marks remain over quality due to these conditions.
With a durum wheat crop of 2.4 MMT that should produce a French all wheat crop in excess of 39 MMT this year compared to 36 MMT in 2011.
Wheat isn't the only crop that has done well in France this year, the Ministry also increased their estimate for 2012/13 domestic barley production to 11.3 MMT, including an 80% increase in spring barley output, for a 28% rise on last season's barley crop.
Elsewhere FC Stone Europe said Germany is also seeing better than expected yields.
Ukraine state weather forecaster estimated Ukraine’s 2012 corn crop at 20.0 MMT versus it's previous estimate of 21.0 MMT and the USDA's forecast of 24.0 MMT.
