05 July 2015 | Online since 2003

Gleadell Grain Market Report 6th July 2012



6 July 2012 09:24:02|Market Reports,News

Gleadell Grain Market Report - 6th July 2012


Jonathan Lane, Gleadell’s trading manager, comments on grain markets:

WHEAT

- USDA reports US wheat harvest 69% complete, 59% last week and 49% last year.

- USDA reports spring wheat crop in good/excellent condition at 71%, down 6% on the week.
- USDA raises US corn and wheat acreage – quarterly stocks seen at traded expectations.
- Ukraine’s PM promises free grain exports in 2012/13 – expects good harvest and have no plans to impose restrictions.
- Argentine wheat farmers have planted nearly half of the planned area – seedlings off to a good start – favourable weather.

- India sells 1st wheat cargo to Asia in 7 years – Government allows 2mln t of wheat exports.
- USDA report corn crop in good/excellent condition at 48%, down 8% on the week – lowest ratings since crop disaster of 1988.
- Ukrainian farm minister cuts Ukraine’s 2012/13 grain export forecast to 22-23mln t from 25-27mln t.
- Ukraine sees 20-21mln t of grains harvested early in 2012, mainly wheat and barley, against 34mln t in 2011.
- IGC cuts 2012/13 global wheat estimates to 665mln t, down 6mln t since last month and 30mln t lower than in 2011/12.
- EU new crop wheat futures reach contract highs on continued US heat worries.

Summary

The US acreage/stock numbers released last Friday, deemed as mildly bearish, traded for about 15 seconds before weather issues returned, pushing the markets higher.

Extreme hot weather remains in the forecast for the Mid-west, stressing the corn crop further. Average trade estimates for the US corn yield are now around 154bpa against the current USDA forecast of 166bpa which, if correct, would reduce the US crop by 27mln t, but would still achieve a crop close to the record 2009/10 season.

A pause for thought regarding the US corn supply and demand: if you plug in the 2011/12 US domestic usage numbers into the current 2012/13 season projection, with the increased acreage, the US corn yield could drop to 142bpa before stocks fell below the 2011/12 level. Maybe, just maybe, these markets are getting overdone.

The current weather situation in the UK and its potential to promote fusarium development and increase associated mycotoxin risk, is of keen interest to all. This increases the likelihood of growers needing to provide accurate risk assessment results in wheat.

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