Grain trade remains strong as a revised forecast for 2012 cereal production went down by 2 million tonnes according to statistics published by the Food and Agriculture Organisation (FAO).

The forecast for 2012 reckoned world cereal production stood at 2,282 million tonnes, 2.8% down on the year. The revised forecast comes on the back of a decline in maize output in the Russian Federation and Ukraine as harvest draws to a close as well as results from Australia and Brazil as harvest progresses.

In Argentina, rain continued to hamper wheat harvest which was 36% complete, down 3% on the same period last year.

According to a HGCA report, the production estimate remains at 11.15Mt although this could change once harvest in the south, the main wheat belt, gets underway.

In the EU, wheat exports have been at an all-time high with 711.6 Kt having an export licence for the week November 28 to December 4.

The cumulative export licences total now stands ahead of last year’s 3.63 Mt figure although this level of export is unlikely to be sustained due to the amount available. This is likely to increase export demand to the US in 2013. In the US, dry weather has caused concern for winter wheat crops although the next weekly crop condition report won’t be available until April.

New crop prices remained quite strong with Nov-13 prices closing at £198.50/t and Jan-13 contracts gaining standing at £224.50/t.

Barley was a different story though, with the production estimate being dropped by 10%, down to 5.51 Mt. On the forefront this doesn’t look good but providing this figure is realised, it will be up 14% on the year.

Maize plantings were underway although 14% points behind last year to stand at 55% (as of December 6). Some suggest that some of the land once going into maize will now be sown with soya bean due to its ability to be planted later.