EU Wheat Mixed, Production Estimates For 2013 Raised

Posted by Nogger - a legend in his own mind at 06:57 | Categorized as

20/06/13 -- EU grains closed mixed with Jul 13 London wheat finishing the day GBP0.55/tonne easier at GBP162.50/tonne, and with Nov 13 ending GBP0.45/tonne higher at GBP170.50/tonne as the gap between old and new crop widens further. Nov 13 Paris wheat settled EUR0.25/tonne steadier at EUR200.00/tonne.

French analysts Strategie Grains increased their EU-28 soft wheat production estimate from last month to 131.5 MMT, up 600,000 tonnes from their May forecast and a 5% rise on the 2012 crop.

"This figure could go even higher if conditions are favourable as the growing cycle ends," they said.

With a durum crop of 8.0 MMT, Strategie Grains now estimate the EU-28 all wheat crop at 139.5 MMT, around 2 MMT more than the USDA's current forecast.

They also raised their EU-28 barley production estimated from 55.3 MMT to 56.1 MMT (and versus 55.6 MMT from the USDA), but cut their corn number by 400 TMT to 66.0 MMT, although that's still 15% up on last year and higher than the USDA's 63.9 MMT.

For wheat in 2013/14 "Global trade is projected to fall and thus leave a smaller share for EU exports on the global market. As a result, the EU will not be in a position to export all of its exportable surplus, which suggests a heavy situation pulling down prices in the EU, and this bearish effect may be reinforced by the heavy maize balance sheet," they said.

News that China apparently bought 200-220 TMT of French new crop wheat yesterday was seen as supportive however.

Brussels granted 203 TMT of EU soft wheat export licenses in the past week, bringing the marketing year to date total to 18.56 MMT, up almost 50% on year ago levels. Corn imports however are also sharply higher, up nearly 80% versus 2011/12 at 10.6 MMT.

Russia's 2013/14 wheat exportable surplus could rise from around 11 MMT this season to 18-20 MMT, according to the head of the Grain Union there. Harvesting is expected to begin next week, around 2 weeks earlier than normal, he added. Early barley yields have so far been better than expected and substantially higher than last year.

Ukraine's state weather centre forecast the corn crop there this year at 23.0-24.2 MMT depending on whether or not they get rain in July. That compares to a USDA estimate of 26.0 MMT and output of 20.9 MMT in 2012.