Jonathan Lane, Trading Manager at Gleadell Grain Merchants, offers the latest insight into the global grain market where, although the forecast for spring crops looks good, particularly in the United States, weather conditions have caused concerns, especially in Europe.

The swift pace of current US plantings, in what remain generally favourable conditions, has seen US prices remain under pressure for most of the past week.

Improving US winter wheat crop ratings, although SRW ratings slipped last week, added to the bearish tone. Analysts are mulling over the possibility of early planted corn resulting in early harvested corn, which would ease current supply worries, leading to profit-taking.

Within the EU there is a completely different scenario with major concerns over crop conditions continuing to drive values higher. Spanish and German wheat crop estimates have been reduced, and with the already-known winter losses in France- and weather related issues in Eastern Europe - points to lower wheat estimates for 2012/13.

In addition, the technical squeeze in the old crop MATIF and LIFFE exchanges has intensified, pushing futures £7-8/t higher. Once these contracts are out of the way we may well see sense return to old crop markets.

Summary

• USDA report US corn plantings at 17% complete, up 10% on the week, 5% planted last year, 5% average.
• USDA report winter wheat crop in good-excellent condition at 64% - up 4% on week - improved HRW ratings/declining SRW ratings. Spring wheat plantings at 37% complete - up 21% on the week - 5% planted last year, 9% average.
• Canada's 2012/13 grain and oilseed output forecast higher at 70.72mln t, compared with 65.86mln last year.
• Chinese 2012 corn acreage reported up 2.7% at 35mln hectares - production could surpass last year's record 191mln t.
• UK wheat exports reported at 1.98mln t as of end-February, compared with 2.24mln t a year ago - leaves approximately 600tmt March-June.
• Plentiful rainfall has fallen across all of the UK and it won’t be long before we have had enough for now.
• French new wheat crop ratings are reported as being 62% good/excellent, compared with 75% a year ago.
• Spanish 2012/13 winter grain harvest seen down 25% at 12.72mln t, soft wheat crop estimated at 4.6mln t, down 3% from 5.96mln t last year.
• German Farm Cooperatives Association cuts its forecast for 2012 wheat harvest to 21.5mln t, from 24.2mln t estimated in March due to cold weather/dryness.
• Rail car shortage cuts Kazahkstan's grain export forecast - exports now projected at 11-12mln t against previous forecast of 15mln t.

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