Morning News Snippets

08/07/13 -- There's not a lot to get your teeth into so far this morning, with a relatively subdued feel to the market. That will all change later in the week no doubt when the USDA release their July WASDE report on Thursday. At least that means that we in Europe don't have to wait a whole weekend to trade the numbers for once.

I wonder what they will come out with for world wheat production? They dropped their estimate last month from a record 701 MMT to a almost but not quite record 696 MMT. Subsequently US winter wheat yields have maybe come in better than expected, ditto Russia and Ukraine. We've also seen the FAO/AMIS raise their estimate from 702 MMT to a new record 704 MMT.

The latter also upped their world corn production estimate to a record 972 MMT this month, 9 MMT more than the USDA suggested in June.

There is potential then it would seem for another bearish slant to things later in the week.

Russian wheat production estimates are slipping however. IKAR this morning have cut their forecast for the Russian wheat crop from 54.0 MMT to 52.4 MMT. That puts them in a similar ballpark to APK Inform (52.1 MMT) and the IGC (52.0 MMT), if a little above Lanworth's 51.0 MMT estimate. The USDA went 54.0 MMT last month. My feeling is that they could end up with a crop of around 49-50 MMT based on reports I am hearing from over there. It may be that it's the other FSU nations and the Eastern Europeans that will be the most aggressive marketeers in in first half of 2013/14.

Harvesting in the southern district of Stavropol is almost halfway done already, and as one contact puts it "early harvests are rarely bumper harvests" - at least not in Russia. The local Ministry say that almost 3 MMT of grains and legumes have been harvested with an average yield of 3.06 MT/ha. Unhelpfully they don't give us a comparison with last year. However, early barley yields were reported to be averaging 3.71 MT/ha mid-June, so things have clearly slipped as the harvest has progressed.

The Ukraine Ministry said that they'd exported 120 TMT of grains, mostly corn and barley, last week - the first week of the new 2013/14 season. They said that they are concerned about falling domestic wheat prices, with 3rd grade milling wheat prices as low as UAH1430/tonne (under GBP118/tonne) at farm level. They see 2013/14 full season exports up 14% to a record 26.0 MMT, although the likes of APK Inform see shipments reaching in excess of 29.0 MMT. Well, they will at those prices won't they?

Jul 13 London wheat has finally expired. New front month Nov 13 opened GBP0.10/tonne lower this morning but has now turned higher, aided by an ailing pound. Paris wheat currently trades around 1-2 euros weaker.

The US agricultural attaché says that Pakistan’s wheat crop will rise from 23.3 MMT to 24.0 MMT this year, the same numbers that the USDA themselves give. Domestic consumption is also pegged at 24.0 MMT.

Even friendless Iran have said that they won't import Indian wheat due to contamination fears.

The Saskatchewan Ministry of Agriculture say that 83% of spring wheat, 87% of the durum, and 73% of the canola crop is rated good to excellent. In Alberta 84.9% of all crops are rated good to excellent versus a 5-year average of 66.3%. That includes spring wheat at 86.2% good to excellent, durum 87.5% at good to excellent, barley at 84% good to excellent, oats at 87.9% good to excellent, and canola at 83.1% good to excellent.