November 12, 2012

 

USDA cuts world wheat crop to 651.4 million tonnes

 

 

The USDA slashed the world wheat crop from 653 million tonnes to 651.4 million tonnes but also lowered consumption by a bit more than that - down almost three million tonnes putting 2012-13 ending stocks 1.2 million tonnes higher than last month at 174.2 million tonnes.

 

At the end of the day however, world wheat consumption is seen outstripping production by 24 MMT this season. EU wheat closed mixed, with November 12 London wheat down GBP0.50 (US$0.79) per tonne to GBP220.75 (US$351) per tonne, May 13 up GBP0.50 (US$0.79) per tonne to GBP227.00 (US$361) per tonne and new crop November 13 down GBP0.55 (US$0.87) per tonne to GBP194.20 (US$309) per tonne.

 

For the week overall November 12 London wheat posted impressive gains of GBP8.75 (US$14) per tonne, with May 13 up GBP8.65 (US$14) per tonne and November 13 rising GBP5.70 (US$9.06) per tonne. November 12 Paris wheat closed the day EUR2.25 (US$2.86) per tonne former at EUR280.50 (US$356.5) per tonne for a net gain of EUR11.25 (US$14.3) per tonne on the week.

 

In amongst all their data was a reduction in their estimate for the UK wheat crop - down 0.5 million tonnes to 13.5 million tonnes. Production in France (38.24 million tonnes) and Germany (22.43 million tonnes) was also trimmed somewhat, although that was more than compensated for by a 0.75 million tonnes increase in Poland making the overall EU-27 wheat crop 0.35 million tonnes higher than stated last month at 131.82 million tonnes.

 

Production in China was left unchanged at 118 million tonnes, despite their attaché in Beijing estimating production this year at only 108.0 million tonnes earlier this week, although China's import requirement was raised one million tonnes to 2.5 million tonnes. Argentina's wheat crop was also left unchanged at 11.5 million tonnes, around 1.0-1.5 million tonnes above other trade estimates. The Rosario Grains Exchange said 12% of Argentina's wheat crop has been harvested and estimated production there at only 10.12 million tonnes.

 

Australia's wheat crop was cut two million tonnes to 21 million tonnes, which is in line with the average trade guess although some are forecasting a sub-20 million tonnes crop Down Under this year.

 

In world wheat trade, Russia's exports were raised one million tonnes to 10 million tonnes, with Ukraine's raised 2-6 million tonnes. Europe's exports are seen one million tonnes higher this month at 17.5 million tonnes, whilst India's were raised a similar amount to seven million tonnes. Australia's export potential was cut 1.5 million tonnes to 19 million tonnes and America's trimmed one million tonnes to 30.5 million tonnes. Other significant data saw Europe's corn crop cut one million tonnes to 54.65 million tonnes, whilst corn consumption here was raised 1.5 million tonnes to 63 million tonnes.

 

Now we have the USDA report out of the way the trade may start to refocus on European wheat planting progress, or rather the lack of it, next week as attention already turns to production potential for the 2013 harvest. There's already talk of much more spring barley getting planted next year as some growers abandon hope of ever getting their planned winter wheat in. America and Russia also have issues with their poorly established wheat heading into winter dormancy, although lack of moisture rather than too much of it is their problem.

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