EU Grains Mostly Lower, But Still Trades Sideways, USDA Report May Provide Direction

09/12/13 -- EU grains closed mostly lower with Jan 14 London wheat ending down GBP0.30/tonne at GBP164.40/tonne and Jan 14 Paris milling wheat settling EUR1.00/tonne easier to close at EUR209.00/tonne. Feb 14 Paris rapeseed fell EUR2.75/tonne to EUR371.75/tonne, whilst Jan 14 Paris corn dropped EUR0.75/tonne to EUR179.50/tonne.

The market remains stuck in a relatively sideways move, and in need of fresh news and direction, although maybe that will change once we get tomorrow's December WASDE report from the USDA?

French soft wheat exports were only 1.46 MMT in October, down 4.1% versus September and 10% below those of October 2012, according to Bloomberg. Algeria was the top buyer, taking 449 TMT.

Strategie Grains said that the EU-28 will produce 21.3 MMT of rapeseed next year, up 2.4% versus 20.8 MMT in 2013. Plantings will drop 100k hectares to 6.6 million ha, but yields will rise from 3.1 MT/ha to 3.2 MT/ha, they estimate. Output in France will jump 18.6% to 5.1 MMT, they added.

The Australian Oilseeds Federation said that the country will produce 3.2 MMT of canola this year, down from 4.2 MMT last year and the 3.4 MMT estimated previously.

Indian wheat plantings are well advanced at almost 45 million hectares, or nearly 75% of the planned area, up 16.7% on a year ago.

The Russian grain harvest is 95.5% complete at 96.2 MMT in bunker weight. Wheat accounts for 54.1 MMT of that, along with 16.3 MMT of barley and 11.3 MMT of corn.

Russia exported 10.52 MMT of wheat in the Jan/Oct 2013 period, down 26.4% versus the same period on 2012. Wheat imports were up almost four fold at over 650 TMT.

Ukraine shipped an impressive 1.02 MMT of grains in the week through to Oct 8, a similar volume to the previous week, according to APK Inform. This is towards the maximum that their limited infrastructure and logistics will allow.

The trade is now looking towards tomorrow night's (only due out at 5pm London time) USDA WASDE report for some direction. They are not expected to change their November US production estimates for wheat, corn and soybeans, although they are due to revise their global supply and demand forecasts.

The trade is expecting increases for wheat production in Australia and Canada, along with a reduction to output in Argentina.

They are also expected to trim US 2013/14 wheat ending stocks from 565 million bushels last month to around 553 million this time round.

Very cold weather stretching all the way down to Texas from the Canadian border is raising some fears of damage to US winter wheat.