EU Grains Mostly Higher, Russian Uncertainty Remains

Posted by Nogger - a legend in his own mind at 19:45 | Categorized as

06/09/12 -- EU grains ended mixed but mostly a little higher with Nov 12 London wheat up GBP1.25/tonne to close at GBP204.90/tonne and with Nov 12 Paris wheat EUR1.50/tonne firmer at EUR261.50/tonne.

Uncertainty remains with regards to the Russian wheat/grain situation. The FAO released their latest estimates, pegging Russian wheat output at 40 MMT this year, which is roughly in the middle of recent estimates of 38-41.3 MMT.

The Russian Ministry said that the grain harvest total there so far stands at 56.5 MMT vs 66 MMT at same date in 2011 and 45 MMT in 2010. They didn't however specifically say off what percentage of the planted area this total comes from, although it is likely to be around the 70% mark.

Of that volume 33.6 MMT is wheat, versus 41 MMT a year ago at this stage.

They also said that they may export up to 14 MMT of grains in the 2012/13 season, of which they've already exported 5.3 MMT between July 1 and September 5.

In addition, a report on Reuters said that Russia will air it's views on grains at an urgent G20 summit on October to convened to discuss "dramatic price rises on global grain markets" after more precise harvest data was available.

Nevertheless the leader of the Russian Grain Union said that, with regards to any possible export embargo,  no action will be taken before the end of the year.

Maybe they don't want to compromise Russian winter grain plantings, which are currently forecast rising more than 4% to 16.8 million hectares this year.

There is now talk of Russia dipping into it's intervention stocks rather than issue an export ban and risk upsetting the WTO so soon after finally gaining membership.

Elsewhere thoughts are also turning to new crop plantings. In Ukraine, leading agronomist Mike Lee says that "new crop rape is going back in to the ground, mainly in to warm moist seedbeds which is very different from this time last year. (This also) bodes well for wheat plantings due to start in about three weeks."

Surface soil moisture amounts in Ukraine are at the highest level in the last eight years, report Agrimoney. They also quote a leading grain marketing economist at a Texas University as saying that the US winter wheat area will rise 2 million acres for the 2013 harvest.

Back to this season, at home the HGCA say that 63% of the combinable crop area is harvested, which is behind the average of 85% for this time of year "due primarily to the late ripening of crops, but exacerbated by recent slow progress."

The wheat harvest has now limped past halfway, at 55% done with yields expected to be below average at 7.1-7.5 MT/ha, with recent results suggesting the lower end of that range, and specific weights also low - generally in the range of 60-72 kg/hl, they add.