EU Wheat Ends Week With Little Movement

07/12/12 –- EU grains closed mixed, with Jan 12 London wheat down GBP0.50/tonne to GBP224.50/tonne, with benchmark May 13 down GBP0.40/tonne to GBP227.50/tonne and new crop Nov 13 unchanged at GBP198.50/tonne. Jan 13 Paris wheat rose EUR1.00/tonne to EUR268.75/tonne.

For the week there wasn't much change with Jan 12 London wheat gaining GBP0.75/tonne, May 13 adding GBP0.50/tonne and Nov 13 advancing GBP1.00/tonne. Paris wheat fell EUR0.75/tonne on the week. It was all pretty thin, and already beginning to look holiday-ish.

FranceAgriMer estimated the soft wheat area there for the 2013 harvest will increase by 2% to 4.97 million hectares. The winter barley area is seen rising 6.2% to 1.05 million hectares and the winter OSR area is seen declining 7.3% to 1.484 million hectares.

A report on Reuters suggested that 25%, and maybe even more, of the US winter wheat area is at risk of abandonment due to an ongoing drought on the Great Plains.

"Snow cover remains very limited across the US, due to strong warmth and a lack of any significant precipitation. In fact, many cities in the Midwest are breaking or approaching records for the longest stretch of days with no measurable snowfall. The lack of snowfall across the Plains leaves the winter wheat crop vulnerable to winterkill, especially given the extensive dryness across the region that has hampered proper establishment of the crop," say MDA CropCast.

Conditions in Ukraine are more promising, with 92% of winter crops rated good/satisfactory, according to the Ministry. "Snow cover has increased significantly across west central Ukraine and eastern Belarus and even heavier snowfall is expected in these areas over the next week," MDA CropCast add.

According to Ministry data, only 7% of the emerged winter wheat is in a weak condition against 34% at the same date in 2011.

Ukraine says that it has exported 12.2 MMT of grains so far this season, including 5.6 MMT of wheat, 4.7 MMT of corn and 1.8 MMT of barley. That takes them above their suggested limit on wheat. There are suggestions that privately the Ministry are telling Ukraine traders "that's your lot" as far as wheat exports are concerned.

Ukraine exported 3 MMT of grains in November, that is expected to drop to around 2 MMT this month, the majority of which will be corn.

Unlike Ukraine, Russia doesn't have a sizable corn crop to market. It's grain exports are therefore seen dwindling to only around half a million tonnes this month and next as wheat availability dries up. ProZerno estimated Russia’s 2012/13 wheat exports at 9.9 MMT, down more than half on the 21.4 MMT shipped in 2011/12.

According to Russia’s Agriculture Ministry 15.8 million hectares of the planned winter cropping area of 16 million has now been sown. Winter plantings in 2011 were 16.8 million hectares. Around 15% of the 2012 area might not make it through the winter, which is about double the normal rate, according to local analysts IKAR.

In a first look at prospects for 2013/14 SovEcon estimated next season's Russian grain crop at 81-87 MMT versus a Ministry estimate of around 75 MMT for 2012. The IGC estimate a 4% increase in global wheat production in 2013/14 from the 654 MMT that they forecast this season's crop at last week.

Elsewhere, the Buenos Aires Grains Exchange say that the wheat harvest there has advanced to 36.2% complete, up 10.5 points from a week ago, and only just behind the 39.5% of a year ago. They only estimate production at 10.1 MMT, well below the USDA's 11.5 MMT forecast. Heavy rain and flooding has hit both yields and quality this year.