EU Wheat Mixed, Black Sea Crops Improving

04/06/13 - EU grains closed mixed with Jul 13 up GBP1.80/tonne at GBP182.00/tonne and Nov 13 down GBP0250/tonne at GBP179.00/tonne. Paris wheat closed with front month Nov 13 EUR0.25/tonne lower at EUR207.50/tonne.

The weather situation has improved in eastern Ukraine, southern Russia and western Kazakhstan. MDA CropCast said: "rains should build into southeastern Ukraine and western North Caucasus this week, which will finally begin to ease dryness and crop stress there as well. However, some dryness will likely continue across central Volga Valley."

"Russia’s drought-stressed southern wheat may be in for heavy rainfall this week. Locally heavy rains developed Sunday in the Black Earth wheat area of Russia, 1-3 inches in strong thunderstorms. Low pressure may now expand into Southern Russia also. The GFS model sees a chance for 1-1.5 inches of rain this week in the 4 southern wheat districts Stavropol, Krasnodar, Rostov and Volgograd. Sharp cooling is also anticipated as hot 80s F give way to 70s F," said Martell Crop Projections.

Latest figures from the Russian Ministry say that spring grain planting as of Jun 3 was 90.6% complete at 27.4 million hectares, with spring wheat 86.3% done on 11.1 million ha, spring barley almost finished at 96.3% on 7.8 million ha and corn plantings exceeding expectations at 105%, sown on 2.3 million ha.

The Russian Ag Minister maintained his forecast for a 2013/14 grain crop of 95 MMT, up 32.5% on last year. SovEcon predicted carry-in stocks from this season of 9 MMT, saying that the barley harvest will start in the south within the next few weeks and that the wheat harvest is only now around a month away.

IKAR said that domestic new crop Russian 12.5% milling wheat is offered at USD255-257/tonne FOB the Black Sea (circa GBP167.00/tonne), down around USD15/tonne from a week ago, as exporters there sharpen their pencils. The Russian government sold 30,645 MT of intervention grain in a tender today, bringing the total volume sold since sales began in October to 3.39 MMT.

The Kazakhstan Ministry meanwhile said that spring plantings there are winding down at 96% complete on 14.52 million hectares.

Iran are said to have bought at least 200 TMT of German and/or Black Sea origin wheat, and possibly more. Algeria seek 50 TMT of optional origin milling wheat for August/Sept shipment.

The EU Commission lowered their EU soft wheat production estimate by 1.9 MMT from last month to 127.9 MMT. With durum output of a further 8.9 MMT that give is an all wheat crop of 136.8 MMT, almost 2 MMT less than the USDA's 138.7 MMT estimate. However, the Commission also cut their EU animal feed wheat usage by 2.5 MMT, effectively raising ending stocks by 0.6 MMT to 10.3 MMT.

In addition they pegged the EU barley crop this year at 56.6 MMT (up 4% on 2012), versus the USDA's 55.3 MMT and the EU corn crop at 66.2 MMT (up 17%) compared with only 63.8 MMT from the USDA.

Flooding means that shipping along the middle section of the River Rhine through Germany is likely to remained closed until at least Friday, an official said today. There are also problems on the Elbe and the Danube.

June Paris corn expires tomorrow. The BoE's MPC meeting concludes on Thursday, the same day will also bring the June global cereal supply and demand estimates from the FAO and the latest UK cereals usage data from Defra.