Less malting barley
Crisp Maltings report that "despite a larger planted area, Scotland will produce a malting barley crop considerably smaller and of lower quality than 2011. Concern over the final size of the crop are such, that a considerable quantity of imported malting barley (mainly ex Denmark) has been contracted for shipment to maltings and stores in Central/Southern Scotland and the Borders."
EU wheat closed mostly lower on the day, with Nov 12 London wheat down GBP3.30/tonne to GBP200.80/tonne and Nov 12 Paris wheat unchanged at EUR261.25/tonne. Other old crop Paris contracts were EUR0.25-0.50/tonne lower.
The market went for a late bath as America came in sharply weaker in afternoon trade. Paris wheat fared better than it's London counterpart due to the weak euro as trade unions held a general strike in Greece and the Bank of Spain said that the Spanish economy had continued to shrink at a "significant rate" in Q3 of 2012.
Fund money seemed to want to book profits and exit grains ahead of Friday's upcoming USDA stocks and US wheat production numbers. Who can blame them after last year's surprise Sep 1 corn stocks came in above even the highest trade estimate?
This year's corn harvest is running at a record early pace, so the potential for more new crop to wheedle it's way into Sep 1 old crop stocks is clear.
As has been witnessed many times, if fund money wants out then the market is only going one way whatever the fundamentals say.
Egypt's GASC bought 300 TMT of mostly French wheat in today's tender. With the latter winning 180 TMT of the business at levels around USD347/tonne. Romania also got a slice of the cake with two cargoes at USD350/tonne, making it a European clean sweep. Only one cargo of Russian wheat was only offered at USD372/tonne.
So Russia do indeed appear to have regulated themselves, Ukraine wheat wasn't offered at all, and US wheat came in at a best price of USD356/tonne, and with freight premium of more than USD9/tonne over French origin.
Talk that Australia's wheat crop may fall below 20 MMT this year may have been exaggerated.
With strong incentives for UK growers to plant wheat and/or rapeseed for the 2013 harvest, they note that "we can only expect a considerable reduction in EU malting barley production next year, nor are we going to be able to rely on a large carryover of crop 2012 barley in France and Scandinavia."
Consequently January 2013 malting barley, which was a EUR20/tonne premium in over January 2014 late July, has now switched around to a EUR11/tonne discount as of tonight's close.
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Source: Argentine Beef Packers S.A.