cancel
Showing results for 
Search instead for 
Did you mean: 
Palouser
Senior Advisor

Wheat: Russia, Egypt, Brazil

I'll itemize each below. Inquiring minds want information 😉

0 Kudos
9 Replies
Palouser
Senior Advisor

Russia

UPDATE 1-Russia's 2013 wheat crop may lag forecasts - producers - RTRS

 

24-Jul-2013 03:31

 

  • 2013 wheat crop seen at 45-48 mln T
  • Grain crop expected at 75-80 mln T, below f'casts

 

MOSCOW, July 24 (Reuters) - Russia's 2013 wheat crop may come below official forecasts due to drought in some regions and a late spring in others, the head of the Grain Producers Union said on Wednesday.

 

Russia, one of the world's key wheat exporters, had harvested 26.6 million tonnes of wheat from a third of its planted area as of July 23.

 

The country's wheat harvest will come between 45 and 48 million tonnes this year, up from last year's 38 million tonnes, Pavel Skurikhin, the head of the Grain Producers' Union said.

 

Government officials had expected the crop to reach not less than 50 million tonnes after last year's drought.

 

"Heat in some regions of the Southern and Volga Federal Districts, rains during harvesting in Central District and a decrease in sowed area in Siberia will impact the harvest," Skurikhin told reporters.

 

The grain crop will also lag the official forecast of 95 million tonnes, coming in at 75-80 million tonnes, of which 15.0-15.7 million tonnes could be exported, Skurikhin said.

 

Russia's agriculture ministry expected exports of grain crop to come in at 20 million tonnes in 2013.

 

Russia plans to increase exports and replenish state stocks during the 2013/14 marketing year, which started on July 1, after a drought last year slashed its harvest.

 

(Reporting by Polina Devitt; editing by Alessandra Prentice and Keiron Henderson)
((maya.dyakina@thomsonreuters.com)(+7-495-775-12-42)(Reuters Messaging: maya.dyakina.thomsonreuters.com@reuters.com))

 

0 Kudos
Palouser
Senior Advisor

Brazil

UPDATE 2-Brazil's south coffee, cane belt escapes serious frost - RTRS

24-Jul-2013 08:31

  • Agronomist at big Parana coffee cooperative sees no losses to frost
  • Cane, coffee area temperatures largely in lower single digits Celsius
  • Somar meteorologist says frost hit some isolated coffee, cane farms

 

(Adds meteorologist's comment on frost reaching some farms)

By Reese Ewing and Gustavo Bonato

SAO PAULO, July 24 (Reuters) - Brazil's southernmost coffee and sugar cane areas appear to have escaped serious frost at dawn on Wednesday, although isolated farms may suffer minor losses from the cold snap, meteorologists and cooperative workers in the region said.

Local crop weather forecaster Somar had reported on Tuesday that farms in northern Parana state, Brazil's southernmost coffee producing region, were at risk of moderate to severe frost Wednesday morning.

"The cloud cover kept the temperatures from falling as much as they could have," crop weather forecaster Marco Antonio dos Santos at Somar Meteorologist said. "The losses will be minor, not so serious as said."

Although more than 80 cities in the South reported snow early this week and locals were emailing and tweeting photographs of snowmen - a rarity for Brazil - most of the coffee- and sugar-cane-producing regions in the northern strip of Parana state were spared crop-damaging temperatures.

International sugar and coffee futures have been supported in the past week by forecasts of a potential crop-damaging frost over Brazil's center-south region, home to the world's largest coffee and sugar cane belt.

"Temperatures fell to between zero and negative one (Celsius) in the municipality of Apucarana," said Paulo Sergio Franzini, head of the state agriculture department in the town, which is a major coffee producer in northwestern Parana.

Other cities within a few hundred kilometers of Londrina, in the north of Parana state, only reported minimum temperatures overnight of between 2 degrees and 5 degrees Celsius (35-37F).

Crops in Parana, Brazil's southernmost coffee and cane producing state, were most at risk of damage from the cold front that pushed through southern Brazil early this week. Although once a major producer, Parana now accounts for only 3.5 percent of Brazil's coffee output, after producers moved northward into states such as Minas Gerais which are less vulnerable to frost.

On the 180 hectare (435 acre) coffee farm of Luiz Hafers in the town of Ribeirao Claro about 145 kilometers (80 miles) from Londrina, agricultural administrator Benedito Caetano said temperatures did not drop below 6C.

The early morning guard at the Copagra cooperative in Nova Londrina, a region that produces mostly sugar cane about 180 miles (280km) from Londrina, said that temperatures in the region did not drop below 5C. The state accounts for under 7 percent of Brazil's annual cane output.

At the central offices of Parana state's main coffee cooperative Cocamar, Perennial Crop Coordinator Robson Luiz Ferreira said: "Lows barely dipped between zero and negative one (Celsius) on some lower slopes where we got some isolated reports of frost, but no reports of frost on coffee so far."

Ferreira said he expected no losses to coffee trees' productivity due to Wednesday's cold snap. Cocamar has 11,000 associated farms and handles 300,000 60-kg bags of coffee a season, as well as quantities of grains.

Frost blanketed swaths of Parana's wheat growing areas, south of the coffee and cane regions, on Tuesday. The crop, which was more advanced in development than wheat in the other major producing state of Rio Grande do Sul, was most at risk of loss from the cold snap.

Parana accounts for about 45 percent of Brazil's wheat output and an estimated 40-45 percent of its crop was vulnerable to frost. Agronomists say the damages to the crop will only be fully known in the coming days to weeks.

0 Kudos
Palouser
Senior Advisor

Egypt

UPDATE 3-Egypt seeks deferred payment for wheat-Russian lobby - RTRS

 

23-Jul-2013 16:08

 

  • Egypt to apply to Russian government for delay - union
  • Russia could sell to Egypt part of 1.3 mln tonne stocks

 

MOSCOW, July 23 (Reuters) - Egypt, the world's largest wheat importer, is likely to approach Russia's government for the right to pay late for wheat deliveries after local suppliers refused to defer payment, the head of Russia's Grain Union, Arkady Zlochevsky, said.

 

Egypt has been steadily driven into economic crisis by political turmoil since the January 2011 uprising that ousted veteran leader Hosni Mubarak. Foreign currency reserves have been depleted.

 

"Egypt applied to Russian grain suppliers via trade channels to provide preferential terms for wheat supply and got a reply that commercial companies cannot defer payment," Zlochevsky told Reuters on Tuesday.

 

An official from the General Authority for Supply Commodities (GASC) denied the Russia Grain Union report.

 

"I totally deny what came in the Russian Union report. I pay in cash for any wheat cargo I buy and Egypt has not applied for any changes with regards to how its wheat deals are conducted," Mamdouh Abdel Fattah, vice chairman of GASC, told Reuters.

 

Egypt grows its own wheat, but it still needs huge quantities of foreign wheat with higher gluten content to make flour suitable for its subsidised bread programme. It is the largest importer of Russian wheat.

 

"Egypt is now likely to apply to the Russian government. They need an inter-governmental agreement to do this (to get deferred payment)," Zlochevsky said.

 

Egypt's new minister of supplies, Mohamed Abu Shadi, told Reuters on July 21 that his ministry would speak to officials in Russia "within days" to discuss price and payment facilities. (Full Story)

 

Egypt has not specified how much wheat it would require under deferred payment terms, but Russia is able to supply it from its state stocks of 1.3 million tonnes of grain, Zlochevsky added.

 

Russia's Agriculture ministry said last week that it was able to supply some state stocks to Egypt.

 

The ministry also offered to hold discussions on possible humanitarian deliveries of wheat to Egypt, a reversal of policy that Egyptian officials and traders interpreted as a sign of political support. (Full Story)

 

Russia's Agriculture ministry did not immediately respond to an emailed request for comment on Tuesday.

 

Egypt froze its international purchase for months, from February until the eve of Egyptian President Mohamed Mursi's overthrow on July 3, hoping for a bigger domestic crop.

 

Its absence from the market was Egypt's longest in years and was criticised heavily by the new supply minister on Sunday. (Full Story)

 

Abu Shadi said the military-backed interim government would aim to increase total stocks to between 5 million and 6.5 million tonnes by the end of Egypt's current fiscal year next June. The government has reserves of 3.6 million to 3.7 million tonnes of local wheat and 500,000 of imported wheat.

(Reporting by Polina Devitt in Moscow; additional reporting by Asma Alsharif in Cairo; Editing by Michael Roddy) ((Polina.Devitt@thomsonreuters.com)(+7 495 775 12 42)(Reuters Messaging: polina.devitt.reuters.com@reuters.net))

0 Kudos
pritchh
Senior Contributor

Re: Egypt world supply demand, producrtion- all VERY interesting

* Egypt can't afford wheat but wants to up its reserves anyway, is this a market factor, and if they up reserves by 2 mmt, doess it matter to price. .

 

I am not sure how long you have studying world wheat, use, production. Here are a few insights. Of the major planted crops wheat is the most widely grown, which reduces risk for the composite crop, it is less likely to have huge harm. Annually there are troubles in some areas, there is never a perfect storm where all areas have above trendline, but every year there are areas with above average yields.

 

The next most important theme is economics. High prices induce greater planting Southern hemisphere is expanding like crazy, I will try and fid a link. Fat prices especially 2-3 yrs worth do that. There are few other choices for those with semi arid land, and with prices way over the COP, economics yells plant more. Australia, not just S America, re in expansion mode.  

 

WASDE reduced world ES to 172.4 million tons in July, adjusting for some of the troubles, that is the lowest since 2008/09, but plentiful and way above the  128.8 million of ‘07/08.

 

3. To my mind, those with a different take, please share, the tight 2/13 corn situation has been the driver. 12/13 saw record wheat feeding in the US, a lack of corn drove  that nd probably served to raise wheat prices world wide to some degree. For 13/14, the US corn crop looks to be very large and though some wheat gets fed annually we simply won’t see the price setting, anomaly , of 12/13.

 

4. Overtime commodities trend to the cost of production. Cost of production in real terms falls with technological advances. I know that is rough to take in for producers but it is the base.

 

When circumstances arise and we see a big bull mkt in any grain, it is time to use that sentiment to hedge more, sell more forward. Use the seasonal, use “supposed” bullish news to spread out marketing. This last round it lasted 2 yrs not 1, but that is the risk. Now 7-9$ wheat is so ingrained on producers minds, they will hold back more than usual, remembering holding back worked for 2 yyrs- , that is the set up, good mktigh mgmt means sell more early taking the other side  and stay short longer. 5/6 the extra wheat held will get rices, well into the mkting yrs and probably in an decisively low price.

 

Acknowledgement, I am SRW oriented in my analysis, I don’t have a handle on HWW,

I think exports and domestic use are projected too high for US SRW and ES will be closer to 200 mm.

 

To ponder, will bull spreading in RHRW be worth  looking at at some point, ie maybe during corn harvest when all grains are in a slump, coming out of there, HRW should be semi tight.

 

Back to the subject, yes anyone can find some troubles iin wheat somewheres as yu have. Question is how much is lost, how much lost is already in the #s and much will the good areas add to supply.

 

Endless hopefulness and bull posts doesn’t change the primary fundamental trends.

CBT exists, use it to harvest excess price premia.

0 Kudos
pritchh
Senior Contributor

Re: Egypt world supply demand, producrtion- all VERY interesting

The mkt knows Russia's crop is coming in less than expected. Letss say it comes in at 47.5 vs teh hoped 50. Lets say Egypt somehow finds $ to up their stks by 2 mmt. That is 4.5, vs ES/use of 172 mmt.

 

What parts of the world besides the US SRW crop are doinbg extra well?

 

What is teh composite picture.

 

If CZ goes to 3.90, what will WZ sell for?

0 Kudos
sneeky253
Frequent Contributor

Re: Egypt world supply demand, producrtion- all VERY interesting

Interesting that you mention Australia as in expansion mode.....we basically crop the acres that can be cropped here. Unless we find a wheat variety that grows in the desert then we can't find many more acres to expand into.

0 Kudos
pritchh
Senior Contributor

Re: Egypt world supply demand, producrtion- all VERY interesting

fwiw Egypt uses about 19 mm / yr and grow about half of that.

Thye have  plan to be self sufficient within 5 yrs, a tough row  to hoe.

 

Thye import !10 annualy, teh norm.

 

World production runs 650- 700 mm.

0 Kudos
Palouser
Senior Advisor

Global production vs global trade

Comparison of a country's import of wheat to world production isn't a very good comparison. Most wheat produced is not in a position to be traded and/or is consumed locally. A better measure is a comparison to the global wheat trade which is around 120 MMT annually. This is a more dynamic way to see the importance of specific trading situations. It also has a better correlation to price fluctuations.

0 Kudos
pritchh
Senior Contributor

Re: Global production vs global trade

No a good comparison? wjhy did you bring it up?

 

Egypt needs 2 MMT more, Russia is 2 mmt sshirt,    world ES is 172 mmt,  there isn't anythung tthere  to chANGE the equation, is teh point. For those of us interested in price and direction ,  world exports are looking 149 mmt, use inches uo over time,   supply suitability is THE variable for those who study this in regards to price.

 

The trading  DYNAMIC at hand is thsi is a bear market, taht is the fundamental backdrop and has been since Russia cut of exports .

0 Kudos