EU Grains Press Higher On Black Sea Downgrades
Further Black Sea crop downgrades look likely to to quickly rule out Russia, Ukraine and Kazakhstan as forces to be reckoned with on the international wheat export stage this season.
A Reuters survey pegs Russian, Ukraine and Kazakh wheat production at around 45.5 MMT, 13.0 MMT and 12.0 MMT respectively for a combined crop of 70.5 MMT. That's some 30% down on last year's output of around 101 MMT. The three Black Sea powerhouses would normally account for around a quarter of global wheat trade, but this is now expected to fall to more like 15% in 2012/13, according to Offre and Demande Agricole.
Russia's IKAR says that August grain exports will reach 3.5 MMT, adding to a total of 2.1 MMT shipped out in July. The Agriculture Ministry only estimate Russia’s entire 2012/13 exportable surplus at only 10-12 MMT, yet the government say that there is no immediate need to ban exports.
Russia's grain harvest is currently said to be around 38% complete nationally, and 80% done in the South of the country, the largest production area, where yields are 25-30% lower than last year.
At home, the UK winter barley harvest is around 60% complete with yields coming in around the five year average at 6.2-6.4 MT/ha, say ADAS. Specific weights are below normal, at 52-72 kg/hl, they add. The oilseed rape harvest is said to be only 35% complete, with highly variable yields of between 2.5 MT/ha to 5.5 MT/ha, but averaging 3.4-3.6 MT/ha, down around 10% compared with last season's record 3.9 MT/ha.
The main start of the winter wheat harvest is still a week or two away just yet, although a few fields have been cut so far. One report on Twitter today mentioned Cordiale being harvested in Cambridge with a disappointing yield of 7.4 MT/ha.
The trade is now braced for a big USDA report tomorrow, with US corn yields expected to take another sharp reduction to add to last month's 20 bushels/acre cut. No major changes are expected to US wheat output, with production seen only being trimmed fractionally. US 2012/13 ending stocks are forecast to rise from last month's estimated 664 million bushels to 681 million. World 2012/13 ending stocks are seen down from 182.4 MMT last month to 179 MMT this time round.
With prices at current levels wheat offers are popping up from some unusual sellers. Two Indian state run trading houses say that they have firm agreements to sell 190,000 MT of government wheat reserves for export. Bangladesh is said to be close to striking a deal to sell/barter 1 MMT of wheat to Iran.
