Old Crop London Wheat Hits New Multi-Month Lows
The market looks nervous heading towards the USDA's quarterly grain stocks and their early planting intentions reports due on Mar 28th.
Despite question marks over crops in France and the UK it's not all doom and gloom everywhere. Bloomberg report that the EU wheat acreage for the 2013 harvest will be "up near the 2008 highs" quoting Rabobank.
Germany's DRV forecast a 2013 winter wheat crop there of 23.3 MMT, up almost 9% on last season. Winter barley production will be 12% higher at 7.9 MMT, they said. Winter rapeseed output will also increase by around 12% to 5.4 MMT, they add.
They have the winter wheat area up 7% on last year, with winter barley and winter OSR plantings up 11% and 10% respectively, accounting for most of the rise in production. Spring wheat plantings will decline almost 77%, and the spring barley area by 34%, producing output of 224 TMT and 2 MMT respectively.
Winterkill is insignificant, even with the recent sub-zero temperatures, the only effect that they will have is that they may delay spring plantings by one to one and a half weeks, they suggest.
Ukraine are also bullish on their production prospects this year, with some estimates for grain output as high as 55 MMT versus 46.2 MMT in 2012.
A report on Dow Jones Newswires today suggest that Turkish millers have been buying new crop Russian wheat at USD268/tonne C&F, which equates to only around GBP180/tonne despite the relatively small cargo sizes involved (said to be circa 5,000 MT shipments).
India is tendering to sell 100 TMT of wheat for Apr/May shipment, having turned down bids around the USD295-300/tonne FOB mark last week. They were still said to have been sitting on over 27 MMT of stocks from last year's harvest as of Mar 1st, with another 90-95 MMT crop on the way imminently. They are said to be attempting to get onto Egypt's list of approved suppliers.
Russia sold 61,267 MT of intervention grain yesterday, and a further 62,217 MT again today, bringing the total sold so far since sales began in October to 2.314 MMT.
Winter crop conditions in the south of the country are mixed. "Russia's southern grain belt has become unfavourably dry after more than a month without rain. Low precipitation has been a recurring issue in winter wheat, as only one month out of the past five has been wet," say Martell Crop Projections.
"A new forecast holds out hope for some rainfall in southern Russia, though rains would be less-widespread than originally indicated. The forecast is still rainy and wet in Krasnodar and Stavropol, but the two northern winter wheat districts of Rostov and Volgograd are now drier. A strong cold front triggered heavy snowfall in the Volga Valley last weekend, but precipitation petered out in southern Russia," they add.
Stavropol winter grain crop conditions (vs last year) are: Good 37.7% (35.7%); fair 47.8% (53.4%); Poor 14.6% (9.9%).
Early spring planting is underway in parts of the Southern and North Caucasian districts, with 175.4 thousand ha in the ground, according to the Russian Ministry of Agriculture. Spring grains and oilseeds will be planted on 30.3 million ha, they forecast.
