London Wheat Down For Fifth Session In Six
This was the fifth lower close in six for London wheat, slumping to only its second GBP200/tonne or lower close since mid-August.
Open interest continues to drop in front month Nov 12 London wheat, six weeks ago it was 10,000 contracts (ie 1 MMT), it has now fallen by more than two thirds since then with traders unsure about how much futures standard 72.5kg/hl wheat is out there.
The UK trade is also still trying to weigh up sharply lower production this year (13.6-14.0 MMT), against rapidly diminishing export prospects for the sort of wheat quality that we have.
It also seems highly likely that UK imports will be significantly higher in 2012/13 too. Meanwhile offers of competing raw materials in compounders rations, such as wheatfeed, are plentiful.
On the international stage, Ukraine has exported 5.2 MMT of grains in Q1 of 2012/13, or which 2.4 MMT is wheat, 1.4 MMT corn and 1.2 MMT barley. The Ministry appears to have placed an informal quota of 19.4 MMT on full season exports.
Ukraine's grain harvest currently stands at 32.7 MMT off 80% of the planned area. Yields are averaging 2.74 MT/ha, well down on last year.
Winter plantings are running at 5.1m ha, up 8.5% on a year ago, incl 4.6m ha of wheat. The total winter grain area is expected to be 8.2m ha.
Meanwhile, Russia's grain harvest stands at 66.4 MMT off 91% of the planned area. Yields are averaging 1.844 MT/ha, down 25% on last year. Kazakhstan's grain harvest is at 13.97 MMT off 98% of the planned area. Yields are averaging 0.92 MT/ha, down 43% on last year.
Australia's wheat prospects aren't improving much. "September rainfall was below average over most of the southern mainland of Australia, and in the lowest 10 per cent of records for parts of South Australia, New South Wales, and Victoria," say the Bureau of Meteorology.
Across the pond it seems to be a case of better but must try harder. "The US Southern Great Plains received .81 inch of rainfall on average last week, boosting topsoil moisture for planting. Kansas received only .60 inch, not improving field moisture enough. Growers in the top US wheat state rated topsoil moisture at 68% short-very short, 32% adequate and 0% surplus," say Martell Crop Projections.
