EU Grains Mixed, But Mostly A Little Higher

29/05/13 -- EU grains closed mixed but mostly a little higher on the day after earlier trading generally lower. US winter wheat crop conditions deteriorated again based on last night's USDA report, with 42% of the crop now rated as poor/very poor. Delayed US spring wheat plantings are also supportive.

Jul 13 London wheat finished the day GBP1.00/tonne higher at GBP181.50/tonne, and with Nov 13 ending GBP0.10/tonne firmer at GBP177.40/tonne. Nov 13 Paris wheat settled down EUR0.50/tonne at EUR20450/tonne.

Whilst the US crop may not be in great shape though, the same can't be said for grain production potential in the Black Sea and FSU region, and these are the guys who normally dictate where wheat prices go.

Rusagrotrans said that they expect the Russian grain harvest to come in at 97.2-100.0 MMT today, which would be up around 36-39% on last year. The increase is due to higher plantings in the Southern, North Caucasus and Central Districts, they said. Harvesting is expected to begin 1-2 weeks earlier than normal, they added.

They increased their 2013/14 Russian grain export forecast to 23-25 MMT, including 17-18 MMT of wheat, 3.0-3.5 MMT of barley and 2.5-2.7 MMT of corn. Wheat exports are picking up as the 2012/13 marketing year draws to a close. Russia has exported 323 TMT of grains so far this month (to May 22), of which 188 TMT is wheat, 47 TMT is barley and 87 TMT is corn. That brings the total season to date grain exports to 14.9 MMT with just over a month left to go, suggesting a final 2012/13 total of around 15.5 MMT. Exports of 23-25 MMT next season would therefore represent an increase of around 50-60% on this year.

The Russian government today sold 41,235 MT of intervention grain in its regular bi-weekly auction.

Ukraine spring grain plantings are almost done at 99% complete, say the local Ministry. That includes a record 4.77 million hectares of corn, an increase of more than 9% on last year. The USDA currently has Ukraine down to produce 26 MMT of corn this year, of which 16.5 MMT will be exported. Both are record volumes. Ukraine, agronomist Mike Lee says "plenty of rain around Ukraine at the moment, cool weekend weather has now turned warm, all in all, great growing conditions."

Emerald group said that Australia will produce almost 24 MMT of wheat this year, versus 22 MMT in 2012/13. The eight-day Australian Bureau of Meteorology weather forecast shows excellent and timely rainfall of 20-100 mm for South Australia, Victoria and NSW.

The Egyptian government said that they have procured more than 3 MMT of wheat on the local market since the 2013 harvest began, an increase of 45% on year ago levels. They remain stubbornly absent from the international tender market.

The HGCA said that UK 2012/13 wheat ending stocks will be the highest since 2009/10, despite last year's dramatic slump in production, following record levels of imports.

Whilst the UK and French OSR crops look shoddy, Toepfer today forecast the German crop at 5.46 MMT, an increase of 13.3% on last year. They will also harvest a 2013 wheat crop of 23.35 MMT, up 4.3% on 2012, they forecast.

AccuWeather are predicting a cooler summer than normal for the UK and northern France. "This is not to say that summer like warmth will be absent in the coming months. Short-duration spells of warmer weather are possible in July and August. Agriculturally, it is expected to a decent year for the region. Wheat, sunflower seeds and corn should not suffer under these conditions," they add.