EU Wheat Dragged Lower By Slump In US Market
The fallout from Friday's USDA report continues to generate US fund liquidation, dragging EU grains off last week's record highs, although there are reasons to think that this may not be as good as it gets for EU wheat yet.
Despite a reduced wheat crop in 2012, EU exports are running ahead of last year's pace, and will surely accelerate further as we get into 2013.
IKAR say that Russia has exported 8.5 MMT of wheat so far in 2012/13 out of total grain shipments of 11.5 MMT. Including what is already committed, that means we are knocking on the door of the government's comfort zone already.
Ukraine continues to send out conflicting messages, with their PM apparently saying today that there was no need for grain export restrictions. "We have good stockpiles and a good harvest forecast for next year," he said despite the small matter of an unpredictable winter to get through along with 7-8 months of consumption before the arrival of said good harvest.
FranceAgriMer have made small tweaks to their domestic production numbers, pegging the soft wheat crop at 35.8 MMT versus a previous estimate of 35.9 MMT and up 5.3% from a year ago. Their corn crop is now seen at 15.21 MMT, down 3.1% from a year ago.
The French rapeseed crop is forecast up 1.7% at 5.462 MMT versus 5.442 MMT in 2011. Sunseed output is seen down 14% at 1.617 MMT versus 1.882 MMT. Sunseed plantings were 8% lower for the 2012 harvest.
Rains have eased somewhat in the past week, enabling French farmers to get 80% of their planned winter wheat sown as of last Monday, although that is still well down on 95% a year ago. Only 41% of the crop is emerged compared to 76% this time last year.
In addition, the French corn harvest is only 80% complete versus 99% in 2011 at this time.
French customs data shows that France only exported 3.3 MMT of soft wheat between July 1st and September 30th - down 26% on year. This will likely pick up significantly going forward.
Defra report that UK usage of imported wheat milled in the five week period to Sept 30 was 57.7% higher than a year ago.
Ensus have confirmed that they are to supplement the dire quality of this year's UK wheat harvest by also using an unspecified percentage of imported corn, according to a report on the Farmer's Weekly website today.
Algeria is shopping for 50 TMT of optional origin wheat for January shipment. Jordan are also said to be in the market. Egypt, who have been quiet for the last few weeks, may also not be too far behind.
