EU Grains Mixed, FSU Plantings Have Late Chance Of Progression

Posted by Nogger - a legend in his own mind at 19:29 | Categorized as

08/10/13 -- EU grains closed mixed, having spent much of the day higher, with Nov 13 London wheat settling GBP0.85/tonne firmer at EUR161.10/tonne and Jan 14 down GBP20.90/tonne at GBP161.60/tonne. Nov 13 Paris milling wheat was unchanged at EUR196.25/tonne whilst Nov 13 Paris rapeseed rose EUR1.50/tonne to EUR368.25/tonne.

The GFS model shows much drier conditions for Ukraine and Russia over the next fortnight, colder than normal temperatures are also seen switching to warmer than expected. Local analysts say that the capability of farmers sowing very significant volumes of winter wheat during this period shouldn't be underestimated, especially given the financial incentive that they have given current corn prices.

The respective local Ag Ministries and those with a vested interest don't necessarily agree. The Russian Ministry now see winter grain plantings at 13 million ha and the Russian Grain Union say 13.0-14.0 million. The original Ministry target was 16.4 million. So far they say that winter plantings have been completed on 8.7 million ha, only just over half of the original plan. A year ago winter plantings were at 12.8 million ha.

In Russia, winter grains typically account for around 40 MMT (circa 44%) of an "average" full season grain production of 90 MMT, although planted area is only around a third of total grain acreage.

Separately the Russian Ministry said that the 2013 grain harvest is 83% done at 81.3 MMT. Wheat accounts for 49.8 MMT of that off 86.8% of the planned area. Thus the official Ministry estimate of a grain harvest of "only" 90 MMT this year looks low, even if it is substantially better than last year's 77.2 MMT output.

Ukraine say that they've planted winter wheat on 3.6 million ha, 54% of the original planned area of 6.7 million ha. APK Inform say that a final area of 5.4 million ha, 17% down on last year might be nearer the mark.

Kazakhstan meanwhile have harvested 18.53 MMT of grains off 90% of the planned area. The Ministry there were predicting a final grain crop of only 15 MMT as recently as August (versus 12.9 MMT in 2012).

There's a little vibe developing that these canny FSU nations may be underestimating 2013 grain production, as well as production potential for 2014, for their own nefarious purposes.

The USDA have apparently confirmed that this Friday's October WASDE report will not be released, placing the market further into darkness.

Informa Economics say that the EU-28 wheat crop this year will amount to 142.9 MMT, up nearly 10 MMT on last year. Russia's crop will total 54.5 MMT, up 44.6%, they add.