EU Wheat Closing Comments - Tuesday

31/07/12 -- EU grains finished mixed with Nov 12 London wheat down GBP0.05/tonne to GBP191.95/tonne and Nov 12 Paris wheat down EUR4.75/tonne to EUR257.50/tonne.

Most pundits are now forecasting a Russian wheat crop of only around 45 MMT this year, versus the existing USDA estimate of 49 MMT and output of 56 MMT last year.

Things look a bit better in Ukraine however, where the harvest is already 90% complete, where the wheat crop looks set to come in at around 14 MMT, which is 1 MMT more than the latest USDA estimate, although still well below the 22 MMT produced last year.

Kazakhstan's wheat harvest was forecast at 12 MMT, which 1 MMT below the official USDA forecast by the USDA's bureau in Astana, the Kazakh capital. However, the large volume of leftover stocks from the 2011 record harvest will see exports of 7.5 MMT, which is 0.5 MMT more than the USDA's latest forecast, they added.

Things also seem a little brighter for rapeseed, where Oil World yesterday raised their EU-27 production estimate by 0.8 MMT to 19 MMT. That's 1 MMT more than the USDA's latest forecast and only marginally down on last year.

Much better anticipated yields than last year in Germany are largely responsible now that the harvest is in full swing. French yields also look like increasing modestly, although those in the UK will dip, they forecast.

Winter wheat harvesting in the US has slowed up considerably in recent weeks, from a frenetic early pace. The USDA said last night that 15% of the winter wheat crop was still in the ground compared to 19% normally. Spring wheat harvesting meanwhile is 28% done compared to just 3% normally.