EU Grains End Mixed But Mostly Lower

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

20/09/12 -- EU grains closed mostly lower with Nov 12 London wheat down GBP1.25/tonne at GBP205.10/tonne and Nov 12 Paris wheat up EUR0.25/tonne to EUR261.25/tonne.

The HGCA pegged the UK wheat harvest at 95% complete, and cut their average yield forecast to 6.9-7.2 MT/ha from an indicated 7.1-7.4 MT/ha of just a week ago.

Final yields are expected to ultimately come in "at the lower end of (the) range" they warned. With A UK planted area of around 2 million hectares, that suggests a likely crop of only 13.8-14.0 MMT - the worst output since 2007.

A UK wheat yield of below 7.1 MT/ha would be the lowest since 1992.

Winter barley and oilseed rape harvesting is complete. The spring barley crop is 85% in the barn, along with 80% of the spring OSR crop, they added.

Defra released their final English (not UK) acreage figures, placing the wheat area up 2.2% to 1.9 million hectares, and the OSR area up 7.9% at 713,000 hectares.

MDA CropCast cut their Australian wheat production estimate by 1.4 MMT from last week to 24.0 MMT, which is 2 MMT below the USDA but still towards the upper end of the range of other trade forecasts.

They also cut Russia's output by 1 MMT to 38.3 MMT versus the USDA's 39.0 MMT.

China's Ag Minister says that the 2012 grain harvest there is likely to be a new record and the ninth consecutive year of growth, according to the Xinhua News Agency. Hurrah!

Ukraine said that they'd exported 4.39 MMT of grains so far this season in the Jul 1 - Sep 17 period, a 60% increase on last year. Of that total 2.13 MMT was wheat, 1.25 MMT corn and 0.96 MMT barley. The Ministry say that they will harvest a grain crop of 46.0-46.5 MMT this year (18-19% down on last year), with exports at 20 MMT (8% down on 2011/12) - around 12 MMT of that will be corn.

So far corn yields in Ukraine are said to be disappointing, although early harvest results are from the frequently arid south of the country. Yields should pick up as the harvest progresses north and west.

A report in today's FT says that Ukraine are close to signing a deal with China to supply them with 3 MMT of corn a year in exchange for a cash loans which they will use to buy "Chinese agricultural technologies" with the aim of increasing grain output in the coming years.

Ukraine produced a record grain crop of 56.7 MMT last season, but that could conceivably increase to 80 MMT with better use of modern seed, machinery and agronomy methods in the near future, according to Agritel.