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28 June 2016 | Online since 2003
Scrutton Bland


3 April 2014 09:40:39|

Wetter outlook behind decline in US winter wheat


EU grains closed mostly lower, in line with a fall in US wheat prices last night which extended into today's session.
May 14 London wheat closed GBP2.25/tonne easier at GBP162.75/tonne, and with new crop Nov 14 GBP2.85/tonne lower at GBP152.65/tonne. May 14 Paris wheat closed EUR1.50/tonne lower at EUR206.50/tonne, Jun 14 Paris corn was down EUR2.25/tonne to EUR184.75/tonne and May 14 Paris rapeseed was unchanged at EUR409.75/tonne.
Chicago wheat gained almost 30% between late January and late March, following the return of spec money to the fray after Russia decided to help itself to Crimea. Some consolidation was perhaps maybe therefore due, and as European markets were closing, CBOT wheat was trading more than 40 cents off those late March highs trimming 5.7% off those gains.
A slightly wetter outlook for winter wheat on the US Plains is partly behind the recent decline, and also perhaps signs that tensions over the Russia/Ukraine problem are easing and that grain exports out of the region appear to have been largely unaffected.
Rusagrotans raised their forecast for Russia's April grain exports to 1.6-1.7 MMT, and increased their estimate for full season exports from 23.7 MMT to 24.3 MMT. This would be the second highest foreign sales in Russia's history, they said. They also noted that the country had already exported more than 3 MMT of corn, and will have shipped over 4 MMT (record) by the end of the season. Russia's previous record corn exports were 1.9 MMT in 2011/12.
Meanwhile, Ukraine's 2013/14 marketing year to date grain exports are now at 27.46 MMT, up more than 40% on a year ago. Crisis, what crisis?
Concerns remain regarding dryness in Russia and Ukraine, although the 15-day forecasts are much wetter for both. Spring plantings meanwhile are progressing well.
In Europe crops are also generally progressing well, although rain would be nice in Germany and some eastern European countries. The 15 day forecast doesn't look too bad for these areas either.
Crop conditions in France are better than they were a year ago, and the mild winter means that crop development is advanced. Agritel said that French rapeseed is flowering 15 days ahead of normal.
Copa Cogenca have released their first forecasts for EU crop production this year, forecasting a 2.7% rise in soft wheat output, a 3.6% hike in the corn crop and a barley harvest similar to last year's.
For the UK specifically, they see the wheat crop rebounding 25% on last year's 11.9 MMT to 14.85 MMT. With plantings reported to be up 19% as of Dec 1st, that might even be a little on the low side given the potential for further late winter and even spring wheat plantings, along with what could also be better yields.
Copa Cogeca forecast the UK all barley crop falling from last year's bumper 7.1 MMT to 5.9 MMT. They see the UK OSR crop at 2.5 MMT, up 18% on last year. They even give us an estimate for the 2014 UK corn crop, something that most other analysts don't - 1.9 MMT, the same as last year.

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