Nogger's Blog

04/09/13 -- EU grains followed US markets lower, although support came from Egypt's third tender in the space of a week. The results of that are expected tonight, the lowest offers were said to be from the usual suspects - Russia, Romania and Ukraine at around USD252-253/tonne FOB, although French wheat has narrowed the gap from Monday, coming in at a best priced USD258/tonne.

At the close both Nov 13 and Jan 14 London milling wheat both settled GBP1.90/tonne easier at GBP156.00/tonne, and EUR158.25/tonne respectively. Nov 13 Paris milling wheat fell EUR1.00/tonne to EUR187.75/tonne and Nov 13 Paris rapeseed settled EUR5.50/tonne weaker at EUR384.00/tonne.

The market remains extremely choppy, which is not unusual for this time of year, until more is known about the size of the US corn and soybean crops.

It is generally perceived that the US corn crop is/was closer to being "made" before the worst of the recent hot and dry spell struck than the soybean crop. That explains the particular volatility that we've seen lately in soybeans.

The soybean market is influencing European rapeseed prices, which had risen almost 14% from their late July lows as of last night's close. Beans are up nearly 12% in 2 1/2 weeks, but currently showing signs of cracking.

Lanworth Inc today increased their world 2013/14 wheat crop estimate by 3 MMT from last month to an all time high, just short of 702 MMT and more than 7% up on last year. They did however trim their estimates for US corn and soybean production, although the former (at 13.33 billion bushels) would still be a record output.

Wheat's problem isn't so much that there's going to be 7-8% more of it (depending on who's figures you go with) in the world this year, as that this increase also comes in conjunction with a 10-11% hike in corn production too.

Russia's grain harvest now stands at 62.5 MMT off 56.9% of the combinable crop area, including "about 40 MMT" of wheat for which yields are 41% higher than a year ago at 2.75 MT/ha. They've also harvested 12.3 MMT of barley off 66.3% of plan, plus a smaller percentage of corn and sunseed (409 TMT of corn off 3.4% of plan, along with 826 TMT of sunseed off 4.8% of plan).

CBH Group raised their forecast for wheat production in Western Australia state from around 10 MMT to 11.0-11.6 MMT, around 90% of which they expect to handle themselves. After concerns of a very dry June and July, August rains are said to have completely turned around production potential in the state this year.

APK-Inform said that Ukraine has the potential to export a record 30.4 MMT of grains and pulses in 2013/14, including 18 MMT of corn, 9.5 MMT of wheat and 2.5 MMT of barley.

Bangladesh are tendering for 50 TMT of wheat, their third tender since the beginning of July. Jordan bought 50 TMT of optional origin feed barley for June shipment.

News late in the day reveals that Egypt bought 180 TMT of wheat for Oct 21-31 shipment in today's tender. They booked one cargo of Romanian wheat at USD252/tonne FOB, along with two cargoes of Russian wheat at USD252.80/tonne.