EU Grains Closing Comments

Posted by Nogger - a legend in his own mind at 19:25 | Categorized as

04/09/12 -- EU wheat closed mixed with Nov 12 London wheat unchanged at GBP204.50/tonne and Nov 12 Paris wheat down EUR1.75/tonne to EUR262.75/tonne.

US markets re-opened strongly after their 3-day long weekend, although they'd begun to slip off from the highs by the time Europe was entering the home stretch. Chicago soybeans set fresh all time highs in early trade.

There are reports circulating of an unusual Glencore sale of 60 TMT of barley to Iran loading at the port of Rouen in northwest France this week, which would be the first such sale to Iran for quite a few years. Western sanctions against the Middle Eastern buyer do not include food, of course.

The news is interesting as it comes at a time when EU-27 2012/13 barley sales are already running well ahead of last year's levels. Brussels have issued 1.4 MMT of barley export licences so far in the new marketing year, versus only 757 TMT at this time in 2011.

Whilst EU-27 barley production is forecast steady at 52.85 MMT this year, a modest increase of 2.7% on last year, other producer's output has fallen sharply in 2012. Kazakhstan's crop is down 42%, with Ukraine's falling 27.5% and Russia's output seen declining almost 15% this year, according to the USDA.

That leaves the EU-27 well placed to take advantage of whatever barley export business is around into the Middle East, as we possess a significant freight advantage to other traditional barley exporters such as Australia, Canada and Argentina.

The USDA forecast Kazakhstan's barley exports to fall 75% in 2012/13, with Russia's seen down 37.5% and Ukraine's declining 13%.

The world's largest barley importer is Saudi Arabia, accounting for 42% of all world trade in the grain.

Kazakhstan's Ministry says that the nation has harvested 6.4 MMT of grain off 55% of the planted area, with yields almost half that of those of a year ago at just 0.75 MT/ha.

Russian wheat won the majority of the weekend's Egyptian tender, but there is a feeling around that this may be a good thing, as the sooner they sell whatever their exportable surplus might be this year then the better.

Heading into the close of European trade the USDA reported US wheat export inspections of 25.446 million bushels, up almost 35% on the 18.888 million inspected for export last week. That would seem to indicate that the US is finding steady offtake for it's own wheat even if it is a premium to Black Sea origin grain.