EU Grains Mostly Lower Ahead Of USDA Crop Report

Posted by Nogger - a legend in his own mind at 20:56 | Categorized as

12/09/13 -- EU grains were mostly lower ahead of this afternoon's important USDA crop report.

At the close Nov 13 London wheat settled GBP1.35/tonne easier at GBP153.65/tonne, and Jan 14 was EUR1.30/tonne lower at GBP156.15/tonne. Nov 13 Paris milling wheat fell EUR1.25/tonne to close at EUR186.75/tonne and Nov 13 Paris rapeseed slid EUR0.75/tonne to EUR371.50/tonne.

The HGCA said that the English cereal harvest is just about done, save for a few last minute bits of tidying up. Nationally the UK wheat harvest is said to be 95% complete versus 85% done a week ago. Yields are averaging at around 7.6-7.7 MT/ha, they said.

The winter barley harvest is over. Spring barley harvesting has advanced from 70% complete last week to 85% finished this time round. Yields are 5.5-5.7 MT/ha. The winter OSR crop is 98% harvested and the spring OSR crop is 25% done, they added. Yields on the former are said to be 3.2-3.4 MT/ha and "good" on the latter.

Strategie Grains raised their forecast for the EU-28 soft wheat crop by 1.3 MMT from last month to 135.5 MMT, which is 8% more than last year and the fourth monthly increase in a row. They increased their European barley production estimate by 800 TMT to 59.1 MMT, which also represents an 8% rise on 2012 and is their fifth successive output hike. The EU-28 corn crop was lowered 1.7 MMT from last month to 64.0 MMT, although that is still 11% more than a year ago.

The Russian grain harvest lumbers slowly on, now standing at 67.7 MMT off just over 64% of the projected crop area. Wheat accounts for 42.6 MMT of that off 64.5% of plan. Wheat yields stubbornly refuse to go down, averaging over 40% up on year ago levels. They could end up with a wheat crop of 60 MMT at this rate, even if a larger proportion of it than normal is only feed grade.

They've also currently harvested 13.4 MMT of barley (off 73% of plan), along with almost 600 TMT of corn (5%) and 1.1 MMT of sunseed (6%).

The Russian government are debating whether to increase the 42 billion rubles already promised farmers to compensate them for crop damage this year by a further 12 billion rubles. In sterling terms 54 billion rubles is GBP1 billion in round figures. That does make the cynic wonder if this year's crops are being deliberately under-estimated by local government to qualify for a larger slice of the compensation pie.

MDA CropCast cut their Argentine wheat production forecast by 100 TMT to 11.60 MMT. "Rains favoured central and eastern Buenos Aires this past week, which improved moisture a bit for wheat. However, dryness and hot conditions are resulting in significant crop stress in western and northern areas. Rains should build across Santa Fe, Entre Rios, northeastern Buenos Aires, and La Pampa this week, which will improve moisture there for wheat. However, the sudden shift to much cooler conditions will likely continue to stress the wheat," they said.

Other than that they made no other alterations to the global supply line for wheat on 2013/14.

Wet weather in the FSU, especially Ukraine, is seen boosting corn production prospects in the region.

As the EU market closed the USDA was releasing it's latest September WASDE report, which will dictate market direction tomorrow.