European wheat remains 'steady'
Considering that the harvest is underway, European wheat remains fully steady. Especially if you consider that Chicago wheat has just posted its worst three day loss in more than a year between Friday and Tuesday.
CBOT wheat fell 8% during those three sessions, whereas Paris wheat was less than 3% lower and London wheat less than 1% easier during this time.
The UK supply and demand equation has been altered by the surprise announcement of the imminent re-opening of the Ensus bioethanol refinery on Wilton, with it's annual requirement for more than 1 MMT of wheat.
Meanwhile heavy rain across most of the country yesterday will have stalled the early wheat harvest, although things should soon dry out if the forecast 90F weekend temperatures arrive (at least for the south and south east).
Many pundits are now forecasting a UK wheat crop around 1 MMT below last year's 15.3 MMT total, further tightening the UK balance sheet.
Elsewhere, Russia remain aggressive marketeers, winning 75% of this week's Egyptian business despite widespread reports that this season's crop has been more adversely affected by drought than was realised just a month or two ago.
SovEcon say that Russia’s exportable surplus of 10-11 MMT may run out by November if Russia’s grain exports remain strong. They estimate August grain exports at 2.5-3.0 MMT versus 2.13 MMT in July, and forecast September grain exports also around the 2.5–3.0 MMT mark.
They now see Russia's 2012/13 grain crop at 70-74 MMT compared to their previous estimate of 72-75 MMT and 94 MMT in 2011/12.
Russia’s Ag Ministry say that as of 14th Aug 27 MMT of Russia’s wheat crop has been harvested. Average wheat yields are said to be 2.21 MT/ha versus 3.18 MT/ha at this time a year ago, a reduction of more than 30 percent.
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