EU Grains Lower To Start The Week

22/04/13 -- EU grains closed mostly lower on news of less severe weather in the US over the weekend than the market had feared, and ideas that EU and Black Sea production potential for 2013 is trending higher.

On the day, May 13 London wheat closed down GBP0.50/tonne at GBP195.50/tonne and with new crop Nov 13 GBP2.15/tonne easier to GBP184.50/tonne. May 13 Paris wheat settled EUR1.75/tonne weaker at EUR243.75/tonne.

Russian growers have planted spring grains on 2.2 million hectares so far this year, or 7.4% of the planned area, which is well up on the 900,000 ha that they'd sown this time a year ago. There's increased talk of domestic Russian wheat prices having now fallen low enough to stimulate a bit of export interest in old crop.

The EU Commission’s Monitoring Agricultural Resources unit (MARS) estimated the average EU soft wheat yield at 5.63 MT/ha this year, up 4% on last year and in line with the 5-year average. Barley yields were estimated at 4.48 MT/ha, up 3% on last year and 2.3% up on average. OSR yields were seen at 3.09 MT/ha, similar to last year and 1.6% up on average.

"The start of spring has been characterised by temperatures below the long-term average in northern and central Europe," they said. "As a consequence, a significant delay in winter crop development and spring sowing was observed in most of Europe, with the exception of the Mediterranean regions and around the Black Sea," they summarised.

"While in northern and central Europe the likelihood of realising full crop potentials is somewhat compromised by the long delays, it is still too early to revise the forecasts that have been made in the previous bulletin based on the temporal trends and averages of previous years," they suggested.

Consequently, despite what we see in the fields here, they left potential UK wheat yields the same as last month at 8.02 MT/ha, up 20% on last year, and above the 5-year average of 7.66 MT/ha. For barley they estimate UK yields at 5.52 MT/ha (unchanged from last year, but down on the 5.73 MT/ha 5-year average). For OSR they estimate yields here at 3.5 MT/ha (versus 3.4 MT/ha in 2012 and 3.47 MT/ha for the 5-year average).

In France they said that "yield expectations are currently slightly below the average, but weather conditions in the forthcoming weeks will be critical to evaluate more accurately yield potentials." Whilst in Germany "Crop development is clearly delayed...Spring sowings are also delayed. It is too early in the season to evaluate whether the shortened crop cycle will have negative influences that cannot be compensated further in the season."

They said that promising prospects exist in Turkey, Morocco, Algeria, and north Tunisia, all of which have had average or above average rainfall across the winter.

On the international tender front, Tunisia bought 50 TMT of optional origin soft wheat for June shipment on Friday, the Black Sea may be the most likely supplier. The Philippines seek 50 TMT optional origin feed wheat for July shipment. Libya are tendering for 30 TMT of optional origin soft wheat for May shipment.