US corn yields higher than trade expectations
Wheat
- USDA reports US corn stocks higher than trade expectations – wheat stocks left unchanged.
- Egypt’s GASC purchases wheat for October-November shipment – Russian wheat was still offered.
- Ukrainian officials report wheat export for the season could reach 5mln t, despite agreed 4mln t export quota.
- USDA report US corn crop in good/excellent condition at 22%, unchanged on week – further yield cuts expected.
- Ukraine may limit wheat exports in 2013 – the exportable surplus is seen as being exhausted by November, with Ukraine Ag ministry predicting wheat exports falling from November onwards as agreed quota depleted.
- ABARE cuts its estimate of the Australian 2012/13 wheat crop to 22.5mln t, down from 24.1mln t previously.
- French farm office AgriMer cuts French 2012/13 soft wheat crop to 36.1mln t, still 6% larger than in 2011.
- Strategie Grains cuts its estimate of the EU-27 soft wheat crop to 123.6mln t, down 1.7mln t – maize is also lowered to 53.7mln t.
Summary
The UK harvest continues to advance over the past week, pushing the national figure to approximately 80% complete. In many areas, large volumes of low specific weight wheat is proving difficult for merchants to place or even move.
Millers and domestic consumers are adapting their terms slowly to the crop they are confronted by - with many stating that they will review their terms when harvest is over.
On international markets, the main focus has been on several import tenders held by Egypt, mainly purchasing Black Sea origin wheat. However, on the latest tender, we could have seen the first signs of a ‘slow-up’ in Russian offers, prompting a move to French wheat. With another tender today for late November shipment, who offers what may well be the driver for the next market movement!
The USDA yesterday reported US corn yields and stocks higher than trade expectations, with the wheat numbers much in line. However, on the global picture, analysts believe they are still overstating production, especially in the light of the recent cut in the Australian crop. In addition, even though they reduced production in Russia - many believe by not enough - the Ukrainian forecast was increased, and this just leaves the market expecting further cuts and tightening global wheat stocks in the coming months.
Oilseeds
The latest USDA monthly report cut the soybean yield forecasts again. The reduction of another 0.8 bushels per acre reinforced the bullish outlook for soybeans, which is currently the main driver in the oilseed market. The reduction in yield - and lack of evidence of demand rationing - maintains the very tight supply and demand situation.
UK rapeseed prices remain underpinned, despite the light volumes, as the brisk pace of harvest exports looks set to keep the UK supply and demand situation fairly tight for the balance of the campaign.
UK prices also found support from the weaker GBP as the euro continued its gradual rise against sterling over the week. The Euro rallied on the back of European Central Bank proposals to purchase bonds. The decision, ratified by the German constitutional court, cleared the way for the ECB to take action to attempt to stabilise bond yields in eurozone countries.
