EU Wheat Lower, Large Black Sea Harvest Draws Near

05/06/13 -- EU grains closed lower with Jul 13 London wheat finishing the day GBP2.00tonne easier at GBP180.00/tonne and Nov 13 ending GBP1.25/tonne weaker at GBP177.75/tonne. Nov 13 Paris wheat settled EUR1.50/tonne down at EUR206.00/tonne.

The market needs help and encouragement to move higher, but without it lower is the path of least resistance. With every day that passes the Black Sea harvest gets closer, and despite some market concerns over production there, output is definitely going to be higher - it's just a case of by how much.

The Russian Ag Ministry today estimated the 2013 wheat crop at 54-55 MMT, up around 42-44% on last year, even if slightly below the USDA's forecast of 56 MMT. Total grain exports were pegged at 18-20 MMT in 2013/14, around 30% higher than this season. There will not be any export restrictions in 2013/14, they added.

APK Inform estimated the Ukraine 2013/14 grains/pulse area at a record 16 million ha, including 6.8 million ha of wheat (versus a USDA estimate of 6.6m), 4.7 million ha of corn (similar to the USDA's figure) and 3.3 million ha of barley (versus 3.2m from the USDA). The USDA have wheat production in Ukraine up 40% this year even with a lower acreage number.

Kazakhstan's wheat crop is also seen sharply higher in 2013, up more than 50% according to the USDA.

Elsewhere amongst the major exporting nations Lanworth Inc today pegged the Australian wheat crop in 2013/14 at 24.8 MMT, up 13%, following the recent arrival of timely rains. They also estimated the Canadian wheat crop at 27.9 MMT, an increase of a more modest 3% on last year.

The EU Commission yesterday estimated the EU soft wheat crop at 127.9 MMT, up 3.3% versus 2012. The Argentine wheat crop is forecast at 13.0 MMT in 2013/14, up 18% on last year by the USDA - the Argentine government estimate plantings up by almost 40% without giving a production estimate as yet. Meanwhile the Turkish crop is seen up more than 9% to 21.9 MMT.

Apart from the US and India these are the top seven wheat exporting nations in the world.

Algeria were said to have bought 425 TMT of wheat for Nov shipment in a tender today, some if not all of that may have been French origin.

The trade is waiting on news from France with regards to Egypt's official request for assistance in buying French wheat. Egypt accounted for only 3% of French soft wheat exports in 2011/12 so they may not see them quite as such a strategic partner as Egypt would like.

Russia sold just under 36,500 MT of intervention grain in a tender today. The volume of government stocks sold so far since sales began last October is now in excess of 3.43 MMT.

There's some talk that the Russia government will begin buying grain to replenish their depleted state-owned stocks as early as the beginning of July.

At home an estimated 140,000 ha of spring barley was drilled in the UK in May, almost four times the normal area drilled late, say the HGCA/ADAS.