EU Wheat Declines In Consolidation Mode
The trade appeared to be in consolidation mode, disappointed that following Friday's bullish USDA data Chicago wheat and corn closed lower in a market saturated with speculative length.
Egypt bought 120,000 MT of Russian wheat for September shipment over the weekend at levels substantially cheaper than French or US offers. They clearly haven't pulled away from selling just yet.
FranceAgriMer pegged the 2012 French soft wheat crop at 36.5 MMT versus their previous estimate of 35.9 MMT and a 2011 wheat crop of 34.0 MMT, a 7.4% increase. As of Aug 9th the average yield was 7.5 MT/ha compared to the 5 year average of 7.1 MT/ha. Protein levels are said to be averaging 11.0-11.5 percent.
The durum wheat crop was estimated at 2.3 MMT versus 2.0 MMT in 2011 with an average yield of 5.3 MT/ha. Barley production is forecast at 11.5 MMT, up 31% on last year's 8.78 MMT.
Rapeseed output was seen at 5.3 MMT, unchanged from 2011 with an average yield of 3.4 Mt/ha.
Friday's USDA report was least bullish for wheat, with 2012 US yields forecast increased to 46.5 bushels an acre from 45.6 bushels an acre.
There were rains in parts of the Midwest over the weekend with further rains and cooler temperatures in the forecast for later this week.
The US states of Maryland and Delaware have asked the Obama administration to waive the existing requirement to include ethanol in gasoline sold at the pumps. Other US legislators are asking for a relaxation of the ethanol mandate due to low corn supplies and high prices.
One private estimate out today pegs the combined wheat production of Russia, Ukraine and Kazakhstan at 66.3 MMT this year, a 34% reduction on last year and 2.5 MMT below the USDA's Friday estimate.
Wheat exports from the trio are seen at 18 MMT, down 51% on 2011/12 and 3 MMT less than the USDA said last week. Corn exports are less likely to be impacted by the drought, down 16% to 12.8 MMT versus the USDA's predicted 14.0 MMT suggestion.