Gleadell grain markets - March 2011
WHEAT
The USDA reports that US farmers are likely to plant 92mln acres to corn this year, up from 88.2 last year. However, the USDA also reported that plantings will ’likely fail to refill stocks enough to quell the surge in price’.
CWB sees Canadian 2011/12 all-wheat crop at 23.8mln/t, up 3% from the 3-year low of 23.2mmt harvested last year.
ABARE sees Australian 2011/12 wheat production down from this year’s record, at 24.3mln/t despite an increase in plantings.
Russia expects to import up to 1mln/t of grain this year, less than the 3mln/t previously forecast by the government.
Conditions for Russian crops are not as favourable as thought, with patchy snow cover in key areas and seed, finance and fertiliser in short supply for spring sowings.
Russia may extend its ban on grain exports until the end of the year, reported the Deputy Prime Minister.
Hydro Meteorological Center reported Ukraine’s winter crops survived the winter month satisfactorily, with damaged crops reported on less than 10% of the total planted area, with moisture content in the soil sufficient all over the Ukraine.
Rain and snowfall dispels worries of drought in China, although the wheat area affected by drought in eight major producing provinces is still reported at 5.71mln hectares, with 1.04mln hectares still reported as being severely drought-hit.
Spanish winter cereals plantings down 1%, as seen by the Agriculture Ministry, although soft wheat plantings seen up 1.6%.
Saudi Arabia purchases 275,000 tonnes (US/Brazilian) wheat, next tender seen in June. Saudi seen boosting wheat reserves to create a buffer against an expected global spike in food prices, has a wheat reserve to cover six months.
The HGCA reported that ’supplies of UK wheat look set to become very tight towards the end of the 2010/11 season in June, raising the prospect of increased imports or demand rationing’ and also that ’the stocks-to-use ratio for wheat could fall to a record low’.
Markets remain delicately poised with tight season ending stocks of wheat in the EU, and corn in the US, balanced against the prospects of record US corn production, larger global wheat production, and the potential of further fund selling – as well as increasing reports of pig and poultry de-stocking.
The current political/civil unrest in Libya and other North African countries could dampen demand, although sales to these regions have been concluded over the past weeks. The USDA corn planting number, albeit well above last year, is seen by many -and confirmed by the USDA - not to be a ’stock replenishment acreage’ even using trend yield of 161.7bu/acre. This fact will be closely monitored by traders, especially if any adverse planting/growing issues become apparent over the next few months.
