EU Wheat Mixed, Rapeseed Posts Sharp Gains On Canadian Crop Cut

04/10/12 -- EU wheat closed mostly mixed but mostly higher on the day with Nov 12 London wheat down GBP0.45/tonne to GBP199.05/tonne and Nov 12 Paris wheat EUR2.25/tonne firmer at EUR260.25/tonne.

Paris wheat was steady after another strong showing in yesterday's Egyptian tender, although Argentine wheat also got a look in after matching French origin on price.

The latter's wheat harvest will be underway next month with a crop of around 11.5 MMT generally expected. Opinion is divided as to whether the wet season that Argentina's wheat has seen will ultimately prove detrimental or beneficial.

Australia's wheat production prospects continue to decline, with MDA CropCast today lopping 0.7 MMT off last week's forecast to 20.9 MMT, a decline of more than 28% on last year.

"A few showers returned to south central Queensland and north central New South Wales this past week, which improved moisture slightly for heading wheat. However, significant dryness continued to reduce yields in southwestern New South Wales and South Australia," they said.

MDA CropCast also cut their EU-27 corn production forecast by 2 MMT to 53.6 MMT, almost 11% down on last year's crop of 60.2 MMT.

Stats Canada estimated domestic wheat production there at 26.73 MMT, slightly lower than the 27 MMT expected. They surprised many in the market though with a sharp cut in rapeseed production this year, coming in with an estimate of 13.4 MMT, fully 2 MMT below the USDA's last estimate.

Martell Crop Projections flagged up some potential problems for Canada last month, saying that crop losses were particularly severe in the north of Saskatchewan province, which received rainfall of 150-200% of normal in the June-to-August period.

Paris rapeseed finished the day posting sharp gains of EUR16-17/tonne on news that the world's largest exporter was taking a 2 MMT hit on production this year.

That will tighten the global supply and demand balance sheet. Earlier in the week Agritel say that Ukraine, typically a large supplier to help cover the EU's rapeseed deficit, has already shipped 0.6 MMT of rapeseed in Q1 of 2012/13 out of an expected full season total of 1.0 MMT.

Spain's economy minister insists that the country doesn't need a bailout amidst rumours that they may ask for one as soon as this weekend.