Jonathan Lane, Trading Manager at Gleadells, offers the latest update on the goings on in the global grain markets, where drought in South America, freezing conditions in Russia and the Ukraine and the latest USDA report have governed the market over the past week.

The USDA report was deemed as neutral, as most numbers were already in the market. As expected, soy and corn estimates were trimmed in South America, although not by as much as trade estimates. Wheat stocks continue to build, now at over 213mln/t and, without support from corn/soy, wheat remains bearish. 

The market over the past week has been flat with most awaiting the USDA report today. Weather still is the main focus, regarding either new crop prospects in the Black Sea region, or in South America and its impact upon corn and soybean production estimates.

The news that Russia has increased their grain export projection to 27mln/t means that exports should remain unrestricted through April and into May. 

New crop prospects remain bearish with an expected global increase in wheat area, now combined with the prospect of the largest US corn plantings since 1944 at close to 95mln acres. In addition, as less negative weather trends bolster supplies, this bodes ill for crop prices in the second half of this season. However, there is a lot of weather still to get through and winter is not over yet.

Summary

• The French AgriMer sees 2012 soft wheat area at 5.07 mln ha, up 1.6% from 2011.
• Spanish buyers have purchased around 200,000 tonnes of wheat from the US as traditional supplies dry up.
• Russia reports no limit on grain exports in April and raises grain export forecast for 2011/12 to 27mln/t.
• The Ukraine 2012 grain harvest raised by UkrAgroConsult to 44.7mln/t – wheat lowered to 13.7mln/t but increased corn.
• Canadian wheat stocks, as of 31st December, reported at 20.96mln/t, up from 20.83mln/t the previous year.
• The Indian farm ministry sees 2012 wheat output at record 88.31mln/t – raising hopes for additional exports.
• Corn prices decline as US farmers may plant most acres since 1944.
• The Ukraine will have 6.3mln/t of wheat to export in the 2012/13 season, against exports this year of 7-8mln/t.
• Rains continue to recover Argentine soy crops, but may be too late for the early seeded corn acreage.
• ProAgro sees 2012 Ukrainian grain harvest down 25% at 42.6mln/t, with wheat at 14.6mln/t
• Ukraine bans grain cars from leaving the country, effectively halting railway grain exports.
• Russian Black Sea storms halt grain ships at leading export outlet.
• Indonesian 2012 wheat imports may rise to 5.8mln/t, from 5.2mln/t last year, due to increase in demand.

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