EU Grains Mixed, Corn/Wheat Differential Widens Markedy

Posted by Nogger - a legend in his own mind at 08:18 | Categorized as

01/11/13 -- EU grains closed mixed, but mostly firmer, with Nov 13 London wheat ending unchanged at GBP164.50/tonne, Nov 13 Paris wheat finishing EUR3.75/tonne higher at EUR207.75/tonne, Nov 13 Paris corn EUR1.75/tonne weaker at EUR163.25/tonne, whilst Feb 14 Paris rapeseed was EUR0.50/tonne better at EUR376.00/tonne.

For the week London wheat posted a net loss of GBP0.25/tonne, with Paris wheat up EUR2.75/tonne, Paris corn falling EUR13.25/tonne and Paris rapeseed rising EUR1.75/tonne. The premium that wheat commands over corn widened from an already fairly large EUR27.75/tonne (15.7%) a week ago to a gaping EUR44.50/tonne (27.3%).

The International Grains Council tweaked their world wheat production numbers last night, pegging the global wheat crop at 696.0 MMT versus a previous estimate of 693.0 MMT.

There were cuts for Europe, Argentina and Russia and rises for Canada and Kazakhstan versus last month. Significantly perhaps, even the countries with cuts this month still see production sharply higher than a year ago.

They cut their forecast for EU-28 all wheat production from 143.3 MMT to 142.9 MMT, although that's still a rise of 8.6% on last year. Argentina's potential output was trimmed from 11.0 MMT to 10.5 MMT, a 23.5% increase on 2012/13. Russia's crop was also shaved by 0.5 MMT to 50.5 MMT, which still represents an increase of 34% on 12 months ago.

Production was raised in Canada, from 30.5 MMT to a record 33.0 MMT, a 9.2% increase on a year ago. Output in Kazakhstan meanwhile was upped from 14.0 MMT to 16.0 MMT, a leap of 63% versus 2012/13.

They also added 0.8 MMT to their forecast for EU-28 corn production to 65 MMT, a 15.5% rise compared to last year.

Despite dropping Russia's wheat production forecast, the IGC raised their estimate for exports there from 14.0 MMT to 14.5 MMT, up 29.5% versus 2012/13.

The Russian Ministry said that the grain harvest now stands at 91 MMT in bunker weight off 92.5% of the planned area, and compared with 72.2 MMT twelve months previously. The wheat harvest has now reached 53.6 MMT off 96.9% of the intended area versus 39.6 MMT at this point last year. Winter grain plantings have been completed on 14 million hectares of the planned 16.4 million, versus 15.5 million this time last year.

Ukraine winter grains have been planted on 7.6 million hectares versus 7.9 million 12 months ago. Growers there have now got 93% of their intended wheat area in (at 6.2 million hectares), along with 94% of their planned winter barley area (at 1.1 million hectares).

FranceAgriMer said that winter wheat sowings in France were up from 54% done a week ago to 71% complete as of Oct 28, and significantly more advanced than 57% a year ago. Winter barley has been sown on 87% of the intended area versus 77% last week and 76% in 2012. The corn harvest is only 35% complete versus 16% last week and 62% a year ago.