EU Wheat Grinds Mostly Lower, Egypt Buys Black Sea Origin

Posted by Nogger - a legend in his own mind at 07:22 | Categorized as

18/07/13 -- EU grains were mostly lower on continued harvest pressure and weaker US markets. Fresh news was relatively thin on the ground. Benchmark Nov 13 London wheat closed GBP0.30/tonne weaker at GBP168.10/tonne, with Jan 14 down GBP0.10/tonne to GBP169.50/tonne and Nov 13 Paris wheat settling EUR0.25/tonne easier at EUR194.25/tonne.

French analysts Strategie Grains raised their forecast for EU-28 soft wheat production this year from 131.5 MMT last month to 133.4 MMT this time round, an increase of 6% on last year. Including durum wheat they now have this year's all wheat crop at 141.6 MMT, far higher than the USDA's 138.6 MMT and the largest in 5 years.

Production increases in France, Germany and the UK, the EU's top three wheat producing countries, as well as Bulgaria, Romania and Spain were behind the hike, say Agrimoney.com.

They also upped the EU-28 barley crop from 56.1 MMT last month to 57.3 MMT, a 5% increase on last year. Corn production however was trimmed slightly from 66.0 MMT to 65.9 MMT, although that is still well above year ago levels.

Early reports out of France suggest that wheat protein levels on what has been harvested so far are below expectations.

Egypt's GASC were in the market for wheat today, tendering for only the second time since February and the first since President Mursi was ousted. They ended up buying five cargoes (300 TMT) from Russia, Romania and Ukraine at prices ranging from around USD247-249/tonne.

Black Sea wheat is clearly the cheapest option for many at the moment, but then again it usually is at this time of year.

In Russia the wheat harvest is said to be already over in the southern state of Krasnodar, and 95% done in Stavropol. Yields are higher, although they didn't have a lot to beat in last year's poor performance, and they are tailing off. The total gathered so far is 26.4 MMT of grain, of which 21.4 MMT is wheat with yields averaging 3.21 MT/ha. That's up 25% on last year, but just yesterday average yields were 27% more than a year ago. Barley yields are now only up 8% on 2012's disappointing result, yesterday that was running at 11%.

The Russian republic of Tatarstan has declared a state of emergency due to drought covering 80% of the region. Grain production there is forecast to be even lower than last year.

Russia sold 10,665 MT of intervention grain in today's regular twice-weekly sale, that brings the total sold so far since sales began in October to 3.7 MMT.

MDA CropCast forecast the 2013 world wheat crop at 670.7 MMT, down 0.3 MMT on last week "due to acreage adjustments in U.S. and Kazakhstan spring wheat areas." They also cut the world corn crop by 0.4 MMT to 918.2 MMT "due to dryness in Italy and earlier wetness in Poland."

EU weekly barley export licenses came in at 302 TMT, the most since June 2005. Soft wheat export licenses were issued for 299 TMT which was also pretty respectable and brings the total so far this season to 591 TMT.