EU Wheat Mostly Higher
05/12/12 -- EU grains closed mostly firmer with Jan 13 London wheat unchanged at GBP225.00/tonne, May 13 up GBP1.40/tonne to GBP228.15/tonne and new crop Nov 13 GBP0.65/tonne steadier at GBP198.15/tonne. Jan 13 Paris milling wheat rose EUR2.00/tonne to close at EUR268.75/tonne.
Once more real fresh market changing news was hard to come by ahead of next week's USDA WASDE report due on Tuesday.
Russia said that it had exported 1.445 MMT of grain in November, inlcuding 866 TMT of wheat, 307 TMT of barley and 212 TMT of corn. That brings the 2012/13 marketing year-to-date total to 11.8 MMT.
StatsCanda pegged all wheat production there at 27.2 MMT this year, up 7.5% from the 25.3 MMT output of last year and slightly above the 27.1 MMT that the trade was expecting.
As various banks release their tentative forecasts for grain prices in 2013, most are forecasting a Q1 peak followed by a steady period of decline to Q4 lows. Goldman Sachs appear to be more friendly. They say that "As we turn to 2013-14, we see risks that the supply response may be limited as winter wheat crops in the northern hemisphere are off to an already-poor start."
Adding that "A further decline in global supplies in 2013 creates risks that global wheat inventories decline even further.
"Such an outcome in the face of inelastic food demand would likely push wheat prices sharply higher and well above corn prices to price wheat out of feed demand," according to a report on Agrimoney.com today.
Meanwhile there are tentative signs that US winter wheat weather conditions may be in for a modest improvement in the week ahead. "Drought affected wheat farms in the Southern Great Plains are expecting light-moderate showers on the weekend. Kansas is expecting up to 0.50 inch of moisture in scattered showers Sunday-Monday.
"Unsettled weather would develop from a trough of low pressure aloft, reversing a persistent pattern of warmth and dryness in November and October. A second short-wave disturbance may develop later next week, perhaps less intense than the first. The main point is that prospects for rainfall may improve in the largest wheat growing area of the United States.
"Kansas has accrued a 2.2 inch moisture deficit since September 1, and 4.3 inches since August. Fields are dry through a very deep layer. While one-half inch of rain/snow would be beneficial, additional moisture would be needed to lessen drought. Oklahoma conditions are even drier, the US second leading winter wheat state, explaining very dire crop conditions with 14% good, 42% fair and 55% poor-very poor November 25," say Martell Crop Projections.
