EU wheat closed lower with Nov 12 London wheat down GBP2.50/tonne at GBP204.50/tonne and Nov 12 Paris wheat falling EUR6.25/tonne to EUR260.25/tonne.
It was a subdued start to the week, with news of a potential trade dispute brewing between the US and China knocking market confidence a little. With funds holding large speculative long positions in US corn, soybeans and wheat then any possible sudden moving of the goalposts such as this immediately sparks profit-taking liquidation.
Russia said that it had harvested 63 MMT of grains so far off 75% of the planted area. The Russian Grain Union said that the final harvest volume would be 72 MMT, down 23.6% on last year.
The Ukraine Ministry said that it had harvested 27.63 MMT of grains so far off 70% of the planted area, with yields averaging 2.61 MT/ha, down 14.7% on last year. They expect a final harvest result of 47 MMT this year, versus 56.7 MMT in 2011.
The corn harvest is only 12% complete so far, producing 1.81 MMT with yields coming in at 3.45 MT/ha, they add. Offre et Demande Agricole say that they expect a Ukraine corn harvest of 20.2 MMT this year, a little below the USDA's 21 MMT expectation.
Within 5 years Ukraine aim to have an annual grain
harvest of 100 MMT, using more westernised farming methods, including better quality machinery and seed, the Ministry said. They didn't say where the investment was coming from in a country that habitually retains VAT refunds legitimately due to grain
Ukraine has exported 4.2 MMT of grains so far in 2012/13, an increase of 57% compared to the same period of 2011/12. Of that total so far, wheat exports account for 1.97 MMT, up 61% and corn exports 1.22 MMT. The USDA has Ukraine down to export 12.5 MMT of corn, 4 MMT of wheat and 2.5 MMT of barley in 2012/13. Corn exports will dominate once the harvest nears completion.
Australia exported 2.38 MMT of wheat in August, cutting ending stocks there to just over 9 MMT with one month of their marketing year to go. That implies that maybe the USDA's carryover estimate for 2011/12 may be a bit high at 7.7 MMT. They are using an export figure this season of 23 MMT, the Commonwealth Bank think that this could be closer to 24-24.5 MMT.
This would suggest that with many 2012/13 wheat production estimates now falling well below the USDA's suggested 26 MMT, then possibly Australia won't be quite such an aggressive exporter next season.