Commodity Updates

Daily market commentary: EU

18/06/13 -- EU grains closed mostly higher in what looks like a long overdue spot of consolidation following the recent rout. The bears are still firmly in control however, and that's unlikely to change as the Black Sea harvest gets going just ahead of the combines starting to move in here in Europe too.

Jul 13 London wheat finished the day GBP1.00/tonne firmer at GBP161.75/tonne, and with Nov 13 ending GBP3.00/tonne higher at GBP168.00/tonne. Nov 13 Paris wheat rose EUR1.00/tonne lower at EUR196.75/tonne.

Early reports out of Russia say that 140,200 hectares have been harvested so far in the south of the country, producing 682,600 MT of grains with an average yield of 4.87 MT/ha, up 63% on a year ago. Yields in Krasnodar are up up 32%, whilst in Stavropol they are said to be up 78%. The Russian Ministry are forecasting a grain crop of 95 MMT this year, up almost a third on a year ago.

Ukraine is reporting similar results, with 79,200 ha of land harvested so far with an average yield of 2.25 MT/ha, 37% up versus 1.64 MT/ha this time last year. Yields should improve as the harvest progresses west and north. The Ukraine Ministry are currently forecasting a grain crop of 53-54 MMT, up 15-17% on last year.

The Ukraine Ministry also say that the country had exported 22.48 MMT of grains this marketing year so far (to June 1), including 7 MMT of wheat, almost 13 MMT of corn and over 2 MMT of barley. They estimate 2012/13 ending stocks at 5.78 MMT.

ODA maintained their French soft wheat crop forecast at 36 MMT, a 4 year high. The French durum crop is normally around 2.1-2.3 MMT, taking total all wheat output this year very close to the USDA's current 38.2 MMT prediction.

South Korea are reported to have bought optional origin corn, thought most likely to be sourced from the Black Sea, at USD259.23/tonne C&F. That's said to be their cheapest corn purchase in more than a year. The Asian nation is reported to have bought in excess of 1.3 MMT of corn and wheat on the recent price dip.

Bloomberg are reporting that the UK OSR crop could fall to 1.5-2.0 MMT this year, a drop of anywhere from 20-40% on last year and at least the lowest since 2009 (and possibly the smallest since 2002), meaning that the UK could become a net importer for the first time in four years in 2013/14.

AgriFood Canada are forecasting a rapeseed crop there of 14.1 MMT, up 6% on last year despite a lower planted area. They see this year's Canadian wheat crop at 29.4 MMT, up 8%, with barley production increasing up 6% to 13.8 MMT and corn output rising more than 5% to 13.8 MMT.

Sources report that new crop Black Sea feed barley is offered around USD248/tonne FOB (circa GBP159/tonne). New crop French milling wheat deld Rouen (July) is quoted at EUR192/tonne, circa GBP164.80/tonne based on this evening's late (and reduced) exchange rates of around 1.1650 versus the euro and 1.56 against the dollar.

Daily market commentary: Chicago

18/06/13 -- Soycomplex: Beans were little changed despite the USDA announcing the sale of 240 TMT of new crop beans to China. Oil World said that the US will import up to 100,000 MT of beans in June and up to 150,000 MT of beans in July as demand for meal stays high. Michael Cordonnier estimated the US 2013 soybean planted area at 77.87 million acres, up 750,000 acres from the USDA estimate. He placed the 2013 bean yield at 42.5 bu/acre, unchanged from his previous estimate, pegging production at a record 3.26 billion bushels, also unchanged from his previous estimate. Informa are due out tomorrow with their US 2013 acreage estimates. Last month they had the 2013 US soybean area at 78.286 million acres versus the USDA estimate of 77.1 million. AgriFood Canada estimated the soybean crop there at 4.5 MMT versus 4.9 MMT last year and the USDA's 4.85 MMT forecast. The Argentine farmers strike ends at midnight tomorrow. The Rosario Grain Exchange said that there were 553 trucks entering the port yesterday versus 3,561 last Monday. Jul 13 Soybeans closed at USD15.10 3/4, down 1 3/4 cents; Nov 13 Soybeans closed at USD12.89 3/4, up 4 1/4 cents; Jul 13 Soybean Meal closed at USD451.80, up USD2.70; Jul 13 Soybean Oil closed at 48.81, down 3 points.

Corn: The corn market closed higher, particularly on new crop, on ideas that 2-3 million US acres will still go unplanted this year. South Korea's NOFI bought 68 TMT of optional origin corn for October shipment along with 58 TMT of what was thought to be a first time Black Sea purchase for November shipment at what was said to be the cheapest price in more than a year. Michael Cordonnier estimated the US 2013 corn planted area at 94.3 million acres, down 3.0 million from the USDA estimate. He pegged the US 2013 corn yield at 153.0 bu/acre and estimated production at a record 13.26 billion bushels, both are unchanged from his previous estimate. AgriFood Canada estimated the Canadian corn crop at 13.8 MMT versus 13.1 MMT last year. Weekly US ethanol production data comes out tomorrow. Also due tomorrow are the latest US acreage estimates from Informa, last month they forecast the 2013 US corn area at 96.827 million acres versus the USDA estimate of 97.3 million. Chinese industry analysts estimated the 2012/13 Brazilian corn crop at 77.0 MMT, unchanged from their previous estimate. They forecast the Argentine corn crop at 24.0 MMT, also unchanged from previously. Jul 13 Corn closed at USD6.73 1/4, up 4 3/4 cents; Dec 13 Corn closed at USD5.50 1/2, up 12 cents.

Wheat: Jordan bought 100 TMT of optional origin wheat Sept/Oct shipment. The USDA attach in Saudi Arabia estimated 2013/14 wheat production at 600,000 MT versus 780,000 MT in 2012/13. He pegged 2013/14 Saudi wheat imports at 2.5 MMT, up 13% from a year ago. ABARES estimated global wheat output at 690 MMT, up 5.3% from a year ago, but below the USDA's 696 MMT. They said that the FOB Gulf price of US HRW wheat is seen averaging USD315/tonne in the year starting July 1st versus a previous forecast of USD320/tonne and USD348/tonne in 2012/13. Japan tendered for 152 TMT of US, Canadian and Australian wheat but excluded US Western White Wheat for the fourth tender in a row on GMO concerns. AgriFood Canada estimated the Canadian all wheat crop at 29.4 MMT versus 27.2 MMT a year ago. The Russian and Ukraine barley harvest is underway and yields are said to be much higher than a year ago. ODA said that the French soft wheat crop is 67% good to excellent as of June 4th, up sharply versus the start of April when conditions were only 56% good to excellent. They said that expect the 2013 French soft wheat crop to be the largest since 2009. Jul 13 CBOT Wheat closed at USD6.87 1/2, up 7 cents; Jul 13 KCBT Wheat closed at USD7.19 1/4, up 5 1/2 cents; Jul 13 MGEX Wheat closed at USD7.99, down 1 1/4 cents.

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