EU Grains Flat To Lower Following USDA Report
08/11/13 -- EU grains closed flat to lower, with Nov 13 London wheat ending GBP1.00/tonne easier at GBP163.25/tonne, whilst Jan 14 was down GBP0.40/tonne at GBP163.50/tonne. Nov 13 Paris milling wheat settled EUR1.50/tonne easier to close at EUR201.50/tonne.
Feb 14 Paris rapeseed fell EUR1.00/tonne to EUR376.75/tonne, whilst Jan 14 Paris corn closed EUR0.75/tonne lower at EUR173.50/tonne.
For the week London wheat was down GBP1.25/tonne and Paris wheat fell EUR6.25/tonne despite the weaker euro and Algeria picking up 650 TMT of optional origin milling wheat (said to most likely be French) for Jan/Feb shipment today.
Russia has now planted winter grains on 14.3 million hectares, 87.5% of the original target. This compares to 15.6 million ha this time a year ago. Incidentally, out of a final winter planted area of 15.8 million in 2012, only 14.7 million made it through to spring.
The Ukraine Ag Minister said that he now expects around 400,000 hectares of the originally planned winter grains area to go unplanted. It was feared that this figure was going to be in the region of 1.2-1.3 million ha a month or so ago, but warm and dry conditions since have allowed much of this lost ground to be made up.
He said that he expects the 2014 corn area to increase by around 500,000 ha to 5.5 million ha, with a small downwards revision in area from sunflower making up the difference. That potentially means a 10% rise in corn plantings in 2014. You will recall that this year's crop is expected to be a record in the region of 28-29 MMT.
In what many were calling the most important USDA report for years, Washington cut their forecast for world wheat production in 2013/14 by around 2.5 MMT to 706.4 MMT, although that's still a record crop. Despite the reduction, ending stocks were raised a similar amount, by 2.2 MMT to 178.5 MMT. Essentially they are saying that the increased corn supply for 2013/14 will eat into demand for wheat, raising ending stocks.
Argentina's wheat crop this year was trimmed from 12 MMT to 11 MMT, Australia's was left unchanged at 25.5 MMT and Canada's increased from 31.5 MMT to 33.2 MMT. Europe's wheat crop was raised some 440 TMT and ending stocks here increased by almost 1 MMT to 12.1 MMT despite exports being pegged at a record 24 MMT versus 23 MMT in September.
China's wheat import needs were cut by 1 MMT to 8.5 MMT, with Brazil's left unchanged at 7.7 MMT.
India was forecast to export 1 MMT more wheat than in September at 6.5 MMT.
Wheat production in Russia this year was trimmed from 54 MMT to 51.5 MMT, with Kazakhstan's crop reduced from 17 MMT to 15.5 MMT. The export potential of both was also pared back. Russia's wheat exports are now seen at 16 MMT versus 17 MMT previously, and Kazakhstan's were cut from 9.5 MMT to 8 MMT.
In other news, FranceAgriMer said that winter wheat planting there was 81% complete as of Nov 4 versus 70% a week previously and 75% a year ago. They said that 96% of the winter barley crop was sown versus 87% last week and 92% a year ago. The French corn harvest was said to be 50% done versus 35% a week ago and 77% complete this time last year.
They added that 88% of the French winter barley crop was rated as good/very good versus 76% a year ago. Corn good/very good was trimmed one point from last week to 57%, and much lower than 69% a year ago.
Now that the USDA report is out of the way, here's a few things to look out for next week:
US government offices are closed on Monday due to the Veteran's Day holiday, which means that the usual crop progress report comes out Tuesday night (London time) and the weekly export sales are put back to Friday afternoon. Nov 13 Paris wheat expires on Monday, and Nov 13 CBOT soybeans go off the board on Thursday. Nov 13 London wheat is with us a little while longer yet, that doesn't expire until a week on Friday (Nov 22).
