EU Wheat Mostly Lower, Settles At 11-Month Lows On Weekly Charts
24/05/13 -- EU grains closed mixed but mostly lower on the day. Despite a bit of a midweek rally, today was still the lowest close on the weekly chart for a front month for both London and Paris wheat since last June.
Jul 13 London wheat finished the day GBP1.25/tonne higher at GBP180.00/tonne. Everything else was lower with benchmark Nov 13 ending GBP1.25/tonne easier at GBP178.00/tonne. Nov 13 Paris wheat settled EUR3.00/tonne weaker at EUR204.75/tonne.
For the week that puts old crop Jul 13 London wheat finished GBP1.75/tonne lower, new crop Nov 13 ending GBP0.85/tonne weaker and Nov 13 Paris wheat settling EUR1.50/tonne easier.
The bulls are clinging to lingering Black Sea production concerns, yet APK Inform today said for Russia: "Despite the fact that the weather conditions were not always conducive to both planting works and wintering period of winter grains in some regions, according to the results of our polling, agricultural producers estimate the condition of winter crops areas as mainly good and satisfactory. As for the losses of winter crops, then only a few respondents reported about losses."
They estimated Russian winter wheat production at 31.3 MMT, up 23% on last year, but gave no forecast for spring wheat.
Agritel meanwhile said that most of Ukraine had received 15-30mm of rain in the past 7 days, with more in the forecast.
Turkey said that they are expecting a 9.2% jump in wheat production to 21.9 MMT this year, which explains why they have been actively tendering to sell nearby wheat of late. They are also forecasting an 11% jump in barley output to 11.0 MMT along with a 7.6% increase in corn production to 4.9 MMT.
Analysts are lining up to forecast sharply lower grain prices later in the year it would seem.
Rabobank today cut their ideas on MATIF wheat prices to EUR190/tonne in Q4 of 2013. That compares to a forecast of EUR204/tonne in December, and represents a fall of around 7.2% from where we are currently, based on the Nov 13 price. Whilst they made no forecast for London wheat, a similar percentage reduction here would cut prices to around GBP165/tonne by the end of the year.
Maybe even more worryingly than that is that they see both Paris and Chicago wheat falling back close to their late 2011 and/or early 2012 historical lows. The late 2011 low for London wheat was GBP140/tonne.
Rabobank also said that they see Chicago corn values falling to around USD5/bu and Chicago soybeans to USD11.75/bu by the end of the year. Deutsche Bank meanwhile suggested that new crop Chicago corn prices could dip below USD4/bu in one of the most bearish reports around yet.
Other news shows that Brussels issued 247 TMT of soft wheat export licenses this week, bringing the 2012/13 marketing year to date total to 17.6 MMT, up 47% versus 12.0 MMT this time last year. Corn imports meanwhile are up almost 89% at 10.0 MMT.
FranceAgriMer reported French winter wheat conditions at 67% good/excellent, unchanged from last week. Winter barley was cut one point in the good/excellent category to 66%, spring barley fell two points to 78% and corn five points to 72%.
They said that corn planting has slowed a little, up from 81% to only 87% complete in the past week, and is now slightly behind last year's pace of 89% done. Winter wheat is 19% headed versus 8% last week and 53% a year ago. Winter barley headed is up from 46% last week to 84%, although that still lags last year's 99%.
