EU Wheat Attempts Mini Recovery Following Recent Rout

18/06/13 -- EU grains closed mostly higher in what looks like a long overdue spot of consolidation following the recent rout. The bears are still firmly in control however, and that's unlikely to change as the Black Sea harvest gets going just ahead of the combines starting to move in here in Europe too.

Jul 13 London wheat finished the day GBP1.00/tonne firmer at GBP161.75/tonne, and with Nov 13 ending GBP3.00/tonne higher at GBP168.00/tonne. Nov 13 Paris wheat rose EUR1.00/tonne lower at EUR196.75/tonne.

Early reports out of Russia say that 140,200 hectares have been harvested so far in the south of the country, producing 682,600 MT of grains with an average yield of 4.87 MT/ha, up 63% on a year ago. Yields in Krasnodar are up up 32%, whilst in Stavropol they are said to be up 78%. The Russian Ministry are forecasting a grain crop of 95 MMT this year, up almost a third on a year ago.

Ukraine is reporting similar results, with 79,200 ha of land harvested so far with an average yield of 2.25 MT/ha, 37% up versus 1.64 MT/ha this time last year. Yields should improve as the harvest progresses west and north. The Ukraine Ministry are currently forecasting a grain crop of 53-54 MMT, up 15-17% on last year.

The Ukraine Ministry also say that the country had exported 22.48 MMT of grains this marketing year so far (to June 1), including 7 MMT of wheat, almost 13 MMT of corn and over 2 MMT of barley. They estimate 2012/13 ending stocks at 5.78 MMT.

ODA maintained their French soft wheat crop forecast at 36 MMT, a 4 year high. The French durum crop is normally around 2.1-2.3 MMT, taking total all wheat output this year very close to the USDA's current 38.2 MMT prediction.

South Korea are reported to have bought optional origin corn, thought most likely to be sourced from the Black Sea, at USD259.23/tonne C&F. That's said to be their cheapest corn purchase in more than a year. The Asian nation is reported to have bought in excess of 1.3 MMT of corn and wheat on the recent price dip.

Bloomberg are reporting that the UK OSR crop could fall to 1.5-2.0 MMT this year, a drop of anywhere from 20-40% on last year and at least the lowest since 2009 (and possibly the smallest since 2002), meaning that the UK could become a net importer for the first time in four years in 2013/14.

AgriFood Canada are forecasting a rapeseed crop there of 14.1 MMT, up 6% on last year despite a lower planted area. They see this year's Canadian wheat crop at 29.4 MMT, up 8%, with barley production increasing up 6% to 13.8 MMT and corn output rising more than 5% to 13.8 MMT.

Sources report that new crop Black Sea feed barley is offered around USD248/tonne FOB (circa GBP159/tonne). New crop French milling wheat deld Rouen (July) is quoted at EUR192/tonne, circa GBP164.80/tonne based on this evening's late (and reduced) exchange rates of around 1.1650 versus the euro and 1.56 against the dollar.