Today’s biggest news item comes from the International Grain Council who have cut global 2012/13 corn output by 3 million mt  to 830 million mt; the cut reflects reduced US and Ukraine output. At the same time they also cut 2012/13 global wheat output by 2 million mt to 655 million mt citing reduced output in the EU, Kazakhstan, Australia and Argentina as the main driver  of the reduction. Additionally the report reduced canola (rapeseed) prospects following reduced projections for the  Canadian crop; the report also talked of a decline of almost 25% in global end stocks.

At home, London wheat markets in both current crop and new crop reached contract highs (Nov ’12 and Nov ’13) today. We have seen the Nov ’13 contract start to trade in volume (in London terms) and open interest is approaching 2,000 lots and the new crop contract discount to old crop is closing as concerns are beginning to emerge over northern European winter wheat sowing and establishment in ongoing wet weather conditions.

We still see a few UK fields of wheat standing awaiting harvest in ongoing wet conditions, and many fields which have been harvested still have straw un-baled let alone attracting the attention of pre-sowing cultivations. Delays in sowing, as we all know, result in yield loss, and a delay in sowing until spring can often result in major crop re-evaluation. This season’s out-turn is not a great platform from which to see a poor start to the new crop outlook.

The EU has granted wheat export licenses for 242,000 mt this week bringing the season total to 4.9 million mt.