EU Wheat Lower Again, Old Crop/New Crop Spread Narrows

13/05/14 -- EU grains were mixed with May 14 London wheat closing down GBP2.00/tonne at GBP157.00/tonne, and new crop Nov 14 London wheat GBP1.00/tonne weaker at GBP152.50/tonne. New front month Nov 14 Paris wheat closed EUR0.75/tonne lower at EUR203.50/tonne, Jun 14 Paris corn was up EUR0.25/tonne at EUR183.25/tonne and Aug 14 Paris rapeseed ended the day EUR3.50/tonne higher at EUR362.75/tonne.

For May 14 London wheat this was the lowest close for a front month since the last day of February, as old crop values continue to slide lower to meet new crop. A month ago the May/Nov spread was GBP11.75/tonne, tonight it's only GBP4.50/tonne.

The current mixture of sunshine and showers is ideal for UK crop development. The EU Commission's MARS until estimated UK wheat yields at 8.19 MT/ha this year, up 11% on a year ago, and 10% above the 5-year average of 7.47 MT/ha. That would be the second highest domestic wheat yield on record, and one that potentially puts this year's crop around the 16 MMT mark, a sharp rebound of around a third from last year.

MARS forecast the UK 2014 rapeseed yield at 3.64 MT/ha, an increase of 22% on a year ago. That puts the UK crop at around 2.5 MMT this year versus 2.1 MMT in 2013.

They peg 2014 UK barley yields at 5.80 MT/ha, a small decline of less than 1% on last year's 5.85 MT/ha. That suggests a 2014 UK barley crop of around 5.7 MMT, 20% lower than last year, although that was of course a bit of an anomaly - this would still be more than we produced in 2012.

On an EU-wide basis MARS forecast the average wheat yield at 5.55 MT/ha, which is almost identical to 12 months ago, and 4% up on the 5-year average. EU rapeseed yield will average 3.12 MT/ha, which is also similar to last year and represents a 2.4% rise on the 5-year average. They see EU barley yields averaging 4.59 MT/ha, a 5.3% decline on last year but 2.4% above the 5-year average.

The Russian Ministry said that spring grains have been planted on 14 million hectares, or 43.9% of the intended area, up 1.3 million ha on this time a year ago. Included in that total is 3.1 million ha of spring wheat (23.7% of plan), 5.9 million ha of spring barley (67.4%) and 1.8 million ha of corn (69.4%).

APK Inform forecast the Russian corn crop at 11.3 MMT, a 3% decline on last year, despite plantings rising to a record high 2.6 million ha. They currently see 2014 corn yields falling from last year's record 5.01 MT/ha to 4.65 MT/ha in 2014.

RusAgroTrans said that Russia exported 2.18 MMT of grains in April, including 1.45 MMT of wheat, 246 TMT of barley and 388 TMT of corn. That's a 5.3% increase on grain exports in March. The cumulative Jul/Apr 2013/14 total is now 22.9 MMT, up 58% on a year previously, and only 1.6 MMT of the all time high volume exported in 2011/12. May exports may fall to around 1.35 MMT, with those in June totalling around 1 MMT, they forecast. That would bring the total marketing year grain exports to 25.25 MMT, an increase of more than 60% versus 2012/13.

The Ukraine Ministry say that spring grains there have been planted on 7.219 million ha, or 87% of plan. That includes 4.436 million ha of of corn (86% of plan). They've also sown 3.92 million ha of sunflower (91%) and 1.355 million ha of soybeans (82%).

Recent good rains in Ukraine have alleviated some earlier drought concerns. Winter crops are generally said to be looking good and spring planted grains have got off to a good start.