05 July 2015 | Online since 2003


EU Reports

4 July 2015 | EU Reports
03/07/15 -- EU grains closed mixed on the day, but higher for the week, with corn making the largest advances as the market seems to think that this is the next crop under threat from European heat/dryness.

At the close, Jul 15 London wheat was down GBP0.50/tonne to GBP120.25/tonne, Sep 15 Paris wheat closed a euro easier at EUR204.00/tonne, Aug 15 Paris corn was unchanged at EUR193.75/tonne, whilst Aug 15 Paris rapeseed was down EUR2.75/tonne to EUR394.25/tonne.

For the week, front month London wheat was up GBP5.45/tonne, with Paris wheat up EUR9.75/tonne, corn EUR20.25/tonne higher and rapeseed up EUR3.00/tonne.

At less than EUR10/tonne, new crop corn is now at the smallest discount to wheat in a year, the HGCA note.

French crop conditions are wilting in the heat, with FranceAgriMer today cutting the proportion of winter wheat rated good to very good by 3 points from a week ago to 78%. Although that's still better than 71% a year ago, it is the fifth weekly decline in a row.

It is also worth remembering that whilst these reports are released on Fridays, they actually refer to crop conditions as of the Monday of that week, so it's highly likely that further damage has been done by the very high temperatures seen in France from Tuesday onwards.

In contrast, the more mature French winter barley crop was rated 86% good to very good, up a point on a week ago. The same can't be said for spring barley however, which was cut from 79% good to very good a week ago to 73% this time round. Corn ratings were also cut two points to 81% good to very good. Only 1% of the crop is at the key silking stage yet.

They said that the 2015 French winter wheat harvest was officially 3% complete as of Monday, with the Midi Pyrenees region the furthest advanced at 37% complete.

Almost half the French winter barley crop had already been cut as of Monday (47%), making very rapid progress from only 4% done a week previously. That is also higher than 34% harvested this time last year. They've even cut 1% of the spring barley crop nationally, with the Centre region 8% done already.

French analyst Arvalis said that soft wheat in the southern two thirds of the country is now mature, and should be less damaged by this week's heat that crops in the north which are still at the filling stage.

Wheat yields in the north of the country will therefore not be as good as might have been expected around 10 days ago, they said.

EU soft wheat export licences were 303.7 TMT for the week through to Jun 30, bringing the full season total to a new record 31.3 MMT, up 11.7% on a year ago. Barley export licences were granted for 438.9 TMT, taking the full season total to 9.1 MMT, up nearly 60% from 2013/14.

The leading French export hub of Rouen shipped out 130.8 TMT of grains last week, up from 110.6 TMT the previous week. That included soft wheat exports of 31.5 TMT to Algeria, 41.4 TMT to the Philippines, 43 TMT to Thailand and 8.1 TMT to the UK.

FCStone estimated the EU soft wheat crop at 140.68 MMT, down 5.4% on a year ago. They see corn output falling 14% year-on-year to 66.64 MMT.

Ukraine said that they'd finished 2014/15 exporting 34.8 MMT of grains, of which 11.2 MMT was wheat, 18.8 MMT was corn and 4.5 MMT was barley.

The Ukraine Ag Ministry said that the country will produce 60 MMT of grains this year, with domestic consumption of 27 MMT and exports in 2015/16 at 34-37 MMT. They say that the country will account for 15% of the global corn trade in the new season, along with about 8% of the international wheat export market.

Russia said that they'd ended 2014/15 exporting 30.5 MMT of grains, a 20% rise on a year ago. That includes 21.7 MMT of wheat (up almost 19%), 5.3 MMT of barley (up over 200%) and 3.0 MMT of corn (down nearly 26%).

They estimate 2015/16 grain exports at a similar level (30 MMT), including around 21 MMT of wheat.

The early 2015 Russian grain harvest has been completed on 542k ha, producing 2.1 MMT of mostly barley to date, with average yields at 3.9 MT/ha versus 3.78 MT/ha a year ago.

Ukraine's early grains harvest, which excludes corn, is 6% complete on 310k ha, producing 929 TMT of grain with yields at 3.0 MT/ha compared to 2.8 MT/ha a year ago.



3 July 2015 | EU Reports
02/07/15 -- EU grains closed mostly higher, with Jul London wheat up GBP4.05/tonne to GBP120.75/tonne and Nov 15 also GBP4.05/tonne firmer at GBP135.00/tonne. Sep 15 Paris wheat was EUR4.00/tonne higher at EUR205.00/tonne, Aug 15 Paris corn was also up EUR4.00/tonne at EUR193.75/tonne, whilst Aug 15 Paris rapeseed bucked the trend ending EUR1.50/tonne easier at EUR397.00/tonne.

Agritel report that the early French winter barley harvest is progressing quickly in the warm and dry weather that much of continent was seen this week. Yields are "good" and there's been some nice quality barley coming in, they say. Spring barley however is now starting to suffer under these conditions, they note.

As for rapeseed, early harvest results for that are throwing up disappointing yields which are said to be "much lower than last year".

Tomorrow's FranceAgriMer weekly crop condition ratings will make interesting reading.

Reuters and Bloomberg both report that fires, sparked by combine harvesters, have broken out in various parts of France baking under temperatures as high as 40C this week.

Officials in the Eure-et-Loir region have apparently ordered farmers to plough up 10-metre-wide borders around fields to prevent fires spreading, Reuters say.

The EU Commission have put some flesh on the bones of their forecasts from earlier in the week for an EU soft wheat crop of 139.9 MMT this year, along with barley production at 58.1 MMT and a corn crop of 68.4 MMT. That's a 5.9% drop in wheat output, a 3.5% decline for barley and a 7% fall in the case of corn incidentally.

Wheat production in the UK was pegged at 15.3 MMT in those figures, and barley output here at 6.6 MMT. That would be a decline of 7.8% versus last year for wheat, whilst barley output would be down 4.3%.

They also estimated the French soft wheat crop at 39.0 MMT, with Germany's at 25.6 MMT and Poland's at 10.6 MMT. For barley they have France at 11.9 MMT, Germany at 10.8 MMT and Poland at 3.9 MMT.

In addition, they estimated the EU-28 rapeseed crop at 21.72 MMT, down 10.8% on a year ago, although unfortunately I haven't got a country by country breakdown of that number.

They also gave production estimates for Russia and Ukraine this year, estimating the grain crop at 95-99 MMT in the former and at 57-60 MMT in the latter. Russian wheat output will amount to 55-59 MMT this year, and Ukraine's will come in around 22 MMT, they predict.

MDA CropCast lowered their world wheat production forecast by 2.75 MMT, taking that down to 707.8 MMT versus 717.5 MMT a year ago. Output was pared back in the US, Canada, Australia and the EU, all areas where widely reported potential problems are brewing. Yields here in Europe were trimmed back from an estimated average of 5.62 MT/ha a week ago to 5.59 MT/ha.

They also cut their outlook on the EU corn and barley crops this year as a result of the recent dryness and heat.

They were unchanged on Russia's wheat crop at 55 MMT and have Ukraine's estimated at 23 MMT.

Egypt bought one 60,0000 MT cargo of wheat of Romanian origin for Aug 1-10 shipment. French wheat was priced out, even before more expensive freight was factored in, and so too, a little more surprisingly, was Russian origin material.

There was plenty of Russian wheat on the table, accounting for 9 of the 14 cargoes offered. "However, Russian wheat, offered at its cheapest at $204.74 a tonne excluding freight, was not competitive with the winning Romanian cargo, priced by Nidera at $202.95 a tonne excluding freight," said Agrimoney.

"Indeed, the results might indicate some impact from the fresh Russian export duty introduced this month, which exacts a 50% levy above a threshold price of 11,000 roubles a tonne, equivalent on Thursday to $198.50 a tonne," they added.



2 July 2015 | EU Reports
02/07/15 -- EU grains trade mixed just after midday, with Nov 15 London wheat up GBP1.05/tonne at GBP132.00/tonne, Sep 15 Paris wheat is EUR0.50/tonne lower at EUR200.50/tonne, Aug 15 Paris corn is up EUR0.25/tonne at EUR190.00/tonne, whilst Aug 15 Paris rapeseed trades EUR1.50/tonne easier at EUR397.00/tonne.

Agritel report that the early French winter barley harvest is progressing quickly in the warm and dry weather that much of continent was seen this week. Yields are "good" and there's been some nice quality barley coming in, they say. Spring barley however is now starting to suffer under these conditions, they note.

As for rapeseed, early harvest results for that are throwing up disappointing yields which are said to be "much lower than last year".

Tomorrow's FranceAgriMer weekly crop condition ratings will make interesting reading.

Reuters and Bloomberg both report that fires, sparked by combine harvesters, have broken out in various parts of France baking under temperatures as high as 40C this week.

Officials in the Eure-et-Loir region have apparently ordered farmers to plough up 10-metre-wide borders around fields to prevent fires spreading, Reuters say.

The EU Commission have put some flesh on the bones of their forecasts from earlier in the week for an EU soft wheat crop of 139.9 MMT this year, along with barley production at 58.1 MMT and a corn crop of 68.4 MMT. That's a 5.9% drop in wheat output, a 3.5% decline for barley and a 7% fall in the case of corn incidentally.

Wheat production in the UK was pegged at 15.3 MMT in those figures, and barley output here at 6.6 MMT. That would be a decline of 7.8% versus last year for wheat, whilst barley output would be down 4.3%.

They also estimated the French soft wheat crop at 39.0 MMT, with Germany's at 25.6 MMT and Poland's at 10.6 MMT. For barley they have France at 11.9 MMT, Germany at 10.8 MMT and Poland at 3.9 MMT.

In addition, they estimated the EU-28 rapeseed crop at 21.72 MMT, down 10.8% on a year ago, although unfortunately I haven't got a country by country breakdown of that number.

They also gave production estimates for Russia and Ukraine this year, estimating the grain crop at 95-99 MMT in the former and at 57-60 MMT in the latter. Russian wheat output will amount to 55-59 MMT this year, and Ukraine's will come in around 22 MMT, they predict.

MDA CropCast lowered their world wheat production forecast by 2.75 MMT, taking that down to 707.8 MMT versus 717.5 MMT a year ago. Output was pared back in the US, Canada, Australia and the EU, all areas where widely reported potential problems are brewing. Yields here in Europe were trimmed back from an estimated average of 5.62 MT/ha a week ago to 5.59 MT/ha.

They also cut their outlook on the EU corn and barley crops this year as a result of the recent dryness and heat.

They were unchanged on Russia's wheat crop at 55 MMT and have Ukraine's estimated at 23 MMT.

Egypt are tendering for wheat for Aug 1-10 shipment, with the results expected later this afternoon. Black Sea wheat is probably the favourite origin most likely to win that business.



1 July 2015 | EU Reports
01/07/15 -- EU wheat posted decent early solid gains, with the French market initially building on yesterday's highest closes on the front month in over a year, and with new crop Nov 15 London wheat hitting it's best level since January. The latter contract saw high volume trade, getting as high as GBP136.50/tonne at one stage, although an afternoon turnaround in Chicago soon had European grains following suit.

It was almost as if the market suddenly realised that yesterday's USDA report was bearish for wheat, so why did Chicago wheat end over 30 cents higher?

At the finish Jul 15 London wheat was down GBP0.95/tonne to GBP116.70/tonne, Nov 15 was EUR1.05/tonne easier at GBP130.95/tonne, Sep 15 Paris wheat fell EUR0.25/tonne to EUR201.00/tonne, Aug 15 Paris corn was up EUR3.00/tonne to EUR189.75/tonne, whilst Aug 15 Paris rapeseed rose EUR1.25/tonne to EUR398.50/tonne.

Early strength was supported by concerns that EU crop production potential is wilting in the excessive heat that's around Europe this week. FranceAgriMer on Friday cut the proportion of the French winter wheat crop rated good to very good by four percentage points, and further reductions look likely in the coming weeks too.

Although they release their weekly reports on a Friday, they are actually based on conditions as per Monday of that week, hence we won't really get to see how much damage, if any, has been done by this week's searingly hot temperatures in France until we get next week's report on Jul 10.

The mercury is forecast to hit 39C in Paris today, and to almost match that at 38C on Friday - when the night-time low is set to be a balmy 26C!

In Germany meanwhile, Berlin is forecast to bake in temperatures of 36C on Saturday, peaking at 37C on Sunday.

The country's farmers union, Deutscher Bauernverband (DBV), yesterday estimated this year's German grain crop at 47.1 MMT, an 11% reduction on a year ago. Wheat production will fall 8.3% to 25.12 MMT, corn output is seen down 7.2% to 4.77 MMT, and the German rapeseed crop will tumble 20.5% to less than 5 MMT, they estimate.

A significant decline in plantings, combined with lower yields due to the neonicotinoid ban, has particularly hit rapeseed production this year, they said.

FCStone released their latest EU-28 crop production estimates today, and they are all lower than where the USDA currently stand with the wheat crop here at 140.68 MMT versus the USDA's current 143 MMT forecast. They see corn output at 66.64 MMT (68.14 MMT from the USDA) and rapeseed production at 21.33 MMT (22.10 MMT from the USDA).

The US remains excessively wet, whilst the forecast light showers will offer only very slight relief to the dry areas of the Canadian Prairies. The CWB cut their estimate for this year's Canadian canola crop to 12.6-13.0 MMT earlier in the week, and some private analysts are now saying that even that forecast is still "way too high" and that production could be closer to 10 MMT this year!

A report on Bloomberg today said that Australia & New Zealand Banking Group were likening this year's dryness in Canada to 2002, when wheat production fell to less than 16 MMT on yields of 1.83 MT/ha. The USDA currently has Canadian wheat yields this year at 3.02 MT/ha.

The old 2014/15 marketing year is now officially dead for many, with Russia expected to have exported a record volume of grain in what is technically now last season, despite the temporary duty introduced on wheat sales.

The Russian Grain Union estimate total grain exports in 2014/15 at 31.7 MMT, and Rusagrotrans say 31.9 MMT. The previous record year was 2011/12 when 28.4 MMT was shipped out, so that figure has been comfortably beaten this time round it would seem. Wheat will have accounted for around 21-22 MMT of that total it is thought.

Old crop carryout, including stocks held in the government's intervention fund, are called at around 14.8-15.0 MMT, a sizable figure, that will doubtless mean they will be their usual aggressive selves as soon as the 2015/16 harvest gets going in earnest. That's with the caveat that the new "floating" wheat export duty, which comes in today, doesn't rise too high.

Looking ahead, the Russian Grain Union now estimate the 2015/16 grain crop at 95-98 MMT, including 54-55 MMT of wheat. Rusagrotrans go for figures of 98 MMT and 57 MMT respectively.

Exports in 2015/16 are seen at 29-31 MMT, although there's a difference of opinion on wheat exports. Rusagrotrans has these at 20-21 MMT, but the Grain Union think that they may only total 17-18 MMT, hurt by the new export tax.

Finally, still feeling hard done to? Spare a thought for growers in Ukraine, where the State Stats Service said that agricultural production costs jumped 60% in the first five months of 2015 compared with the same period a year ago.



1 July 2015 | EU Reports
30/06/15 -- EU grains closed mostly higher, getting support from firmer US markets following the afternoon release of the USDA's latest US acreage estimates and quarterly stocks reports, and with the Paris market again buoyed by the weak euro.

At the close, Jul 15 London wheat was down GBP0.05/tonne to GBP117.65/tonne and Nov 15 London wheat was GBP0.35/tonne higher at GBP132.00/tonne. Sep 15 Paris wheat closed up EUR2.75/tonne at EUR201.25/tonne, Aug 15 Paris corn jumped EUR8.00/tonne at EUR186.75/tonne, whilst Aug 15 Paris rapeseed was up EUR5.25/tonne to EUR397.25/tonne.

For Paris wheat, corn and rapeseed this was the highest front month close in more than a year, helped by the weak euro with the market anxious ahead of tonight's GMT 22.00 deadline for Greece to make a crucial loan repayment to the IMF.

Very warm and dry weather across much of Europe this week may be taking some of the shine off potential wheat, corn and rapeseed yields too this year, adding a bit more support to the market.

The EU Commission cut their forecast for the 2015 EU soft wheat crop from the 141.46 MMT estimated previously to 139.95 MMT, a 5.9% fall on 148.76 MMT a year ago.

They did however raise their corn production estimate a little from 68.13 MMT to 68.45 MMT, although that's still a 7% decline compared to last year.

A Bloomberg survey estimated the EU soft wheat crop a little higher, with an average trade guess of 140.6 MMT. The range of estimates was still pretty wide even at this relatively late stage in the game at 137.4 MMT to 145 MMT.

The same survey put the EU all wheat crop at 147.7 MMT, down nearly 10 MMT on a year ago for a drop of 6.3%.

The French all wheat crop was estimated at 39.2 MMT, from within a range of 37.8-40.5 MMT, and up slightly on 39.2 MMT a year ago.

The German all wheat crop was forecast at an average of 25.7 MMT, down 7.6% on a year ago. The range of guesses for that were 24.9-27.0 MMT.

The President of the Russian Grain Union said that the organisation may cut it's Russian wheat production estimate from the current 55 MMT forecast due to excessive dryness and also wetness in various parts of the country.

He also said that the official Ag Ministry's spring wheat planting estimates may be too high.

Russia's new export duty on wheat kicks in tomorrow.

The Ukraine Ag Ministry said that the 2015 early grain harvest had been completed on 188.2k ha, or around 5% of the planted area, producing 573.6 TMT of grains so far with an average yield of 3.04 MT/ha. A year ago at this early stage average yields were 2.78 MT/ha.

Of course winter barley accounts for the vast majority of what has been harvested so far (171.7k ha), producing a crop of 537.2 TMT to date, although a small area of winter wheat is also said to have been cut. Ukraine growers have also begun harvesting winter OSR, the Ministry said.



30 June 2015 | EU Reports
29/06/15 -- EU grains traded higher, playing catch-up with strong gains posted in US markets on Friday night, and with Paris grains supported by further euro weakness.

At the close, Jul 15 London wheat was up GBP2.90/tonne at GBP117.70/tonne, Sep 15 Paris wheat was EUR4.275/tonne higher at EUR198.50/tonne, Aug 15 Paris corn was up EUR5.25/tonne at EUR178.750/tonne, whilst Aug 15 Paris rapeseed traded EUR0.75/tonne firmer at EUR392.00/tonne.

News that talks between Greece and its creditors failed to reach an agreement (again) over the weekend, and the Greek government have now announced that banks there will be closed all week, with cash withdrawals limited to just EUR60/day to try to prevent a further run on bank deposits, saw the pound rise as high as 1.43 against the euro at one point - a level that hasn't been seen since 2007.

William Hill have apparently closed their book on betting on a Grexit saying that the situation is now too volatile. Others still have Greece remaining in the Eurozone as an "odds-on" favourite, although it's starting to look like not as big a certainty as it was.

Betfair puts it as a 67 percent chance that Greece will stay in the eurozone this year, down from an 86 percent chance only a week ago, report Bloomberg.

The IMF will be anxious to check their post in the morning, with a $1.6 billion Greek repayment falling due. I suspect that they will discover that Finance Minister Yanis Varoufakis was out of the office and unable to sign that one some how.

For now, Barclays maintain their view on a pound/euro exchange rate of 1.45 by the end of the year, rising to 1.47 in Q1 of next year.

Further euro weakness down the line should continue to be friendly for Paris grain prices.

In other news, the Canadian Wheat Board estimate this year's canola crop there at 12.6-13.0 MMT, down 16.5-19.0% on last year's 15.56 MMT, and around 2 MMT below the USDA's current 14.8 MMT forecast.

That's just the latest in a series of downgrades for rapeseed production around the globe this year, with sharp falls in output also being predicted in the UK, France, Germany, Poland, Ukraine and Australia too.

APK Inform reported that Russian seaports exported 198 TMT of grains last week, down from 336.6 TMT the previous week. Last week's total included 156 TMT of wheat, 24.8 TMT of corn and 13.9 TMT of barley.

The Russian Ag Ministry say that this season's grain exports (to Jun 24) are now in excess of 30 MMT, including 21.3 MMT of wheat (a 17% increase on a year ago), 5.3 MMT of barley (up more than 200%) and 2.9 MMT of corn (down 27%).

APK Inform said that Ukraine's seaport grain exports were also down sharply last week, at 233.2 TMT versus 575.8 TMT the previous week. Last week's total included 78.7 TMT of wheat and 154.5 TMT of corn.

The Ukraine Ag Ministry said that the country had now exported 34.36 MMT of grains (to Jun 26) this season. That includes 10.83 MMT of wheat, 4.46 MMT of barley and 18.8 MMT of corn.

They also said that he country had now harvested 280.4 TMT of new crop grains and pulses (mostly winter barley), with yields averaging 2.6 MT/ha, along with 7.2 TMT of winter rapeseed, for which early yields have averaged 1.68 MT/ha.



29 June 2015 | EU Reports
29/06/15 -- EU grains trade higher, playing catch-up with strong gains posted in US markets on Friday night, and with Paris grains supported by further euro weakness.

Around noon we see Nov 15 London wheat up GBP0.80/tonne at GBP129.60/tonne, Sep 15 Paris wheat is EUR0.75/tonne higher at EUR195.00/tonne, Aug 15 Paris corn is up EUR3.00/tonne at EUR176.50/tonne, whilst Aug 15 Paris rapeseed trades EUR1.25/tonne firmer at EUR3920/tonne.

News that talks between Greece and its creditors failed to reach an agreement (again) over the weekend, and the Greek government have now announced that banks there will be closed all week, with cash withdrawals limited to just EUR60/day to try to prevent a further run on bank deposits, saw the pound rise as high as 1.43 against the euro at one point - a level that hasn't been seen since 2007.

William Hill have apparently closed their book on betting on a Grexit saying that the situation is now too volatile. Others still have Greece remaining in the Eurozone as an "odds-on" favourite, although it's starting to look like not as big a certainty as it was.

Betfair puts it as a 67 percent chance that Greece will stay in the eurozone this year, down from an 86 percent chance only a week ago, report Bloomberg.

The IMF will be anxious to check their post in the morning, with a $1.6 billion Greek repayment falling due. I suspect that they will discover that Finance Minister Yanis Varoufakis was out of the office and unable to sign that one some how.

For now, Barclays maintain their view on a pound/euro exchange rate of 1.45 by the end of the year, rising to 1.47 in Q1 of next year.

Further euro weakness down the line should continue to be friendly for Paris grain prices.

In other news, the Canadian Wheat Board estimate this year's canola crop there at 12.6-13.0 MMT, down 16.5-19.0% on last year's 15.56 MMT, and around 2 MMT below the USDA's current 14.8 MMT forecast.

That's just the latest in a series of downgrades for rapeseed production around the globe this year, with sharp falls in output also being predicted in the UK, France, Germany, Poland, Ukraine and Australia too.

APK Inform reported that Russian seaports exported 198 TMT of grains last week, down from 336.6 TMT the previous week. Last week's total included 156 TMT of wheat, 24.8 TMT of corn and 13.9 TMT of barley.

The Russian Ag Ministry say that this season's grain exports (to Jun 24) are now in excess of 30 MMT, including 21.3 MMT of wheat (a 17% increase on a year ago), 5.3 MMT of barley (up more than 200%) and 2.9 MMT of corn (down 27%).

APK Inform said that Ukraine's seaport grain exports were also down sharply last week, at 233.2 TMT versus 575.8 TMT the previous week. Last week's total included 78.7 TMT of wheat and 154.5 TMT of corn.

The Ukraine Ag Ministry said that the country had now exported 34.36 MMT of grains (to Jun 26) this season. That includes 10.83 MMT of wheat, 4.46 MMT of barley and 18.8 MMT of corn.

They also said that he country had now harvested 280.4 TMT of new crop grains and pulses (mostly winter barley), with yields averaging 2.6 MT/ha, along with 7.2 TMT of winter rapeseed, for which early yields have averaged 1.68 MT/ha.



27 June 2015 | EU Reports
26/06/15 -- EU grains closed with solid gains on the day, and for the week. A combination of sharply higher US markets, deteriorating EU weather conditions and the weak euro in the face of the as yet failure to reach an accord with Greece, were all supportive today.

At the close Jul 15 London wheat was up GBP3.75/tonne to GBP114.80/tonne, Nov 15 was EUR3.25/tonne higher at GBP128.80/tonne, Sep 15 Paris wheat jumped EUR8.75/tonne higher to EUR194.25/tonne, Aug 15 Paris corn was up EUR4.50/tonne at EUR173.50/tonne, whilst Aug 15 Paris rapeseed climbed EUR3.75/tonne to EUR391.25/tonne.

For the week, Jul 15 London wheat gained GBP3.80/tonne, or 3.4%, and Nov 15 rose GBP6.30/tonne, or 5.1%. Sep 15 Paris wheat meanwhile closed the week EUR15.75/tonne higher than it began it, for a net weekly gain of 8.8%. Aug 15 corn added EUR11.75/tonne, or 7.3%, during the course of the week and Aug 15 Paris rapeseed rose EUR12.00/tonne, or 3.2%.

New crop Nov 15 London wheat posted a GBP4.50/tonne trading range today, and traded as high as GBP131.00/tonne at one stage, it's best levels since early April - but was only able to hold onto some of those advances at the finish. Well over 1,000 lots of the benchmark contract changed hands during the session.

The most active Dec 15 Paris wheat contract meanwhile managed to settle just half a euro off the session high of EUR196.50/tonne, up EUR8.25/tonne on the day, with over 162k lots traded.

A very hot and dry forecast for much of Europe next week and beyond, plus a continuing over-wet outlook for US grains in the Midwest, has sent market shorts scrambling to cover in some of their exposure this week.

Much of Europe is set to swelter under temperatures as much as 10C higher than normal over the next two weeks, with rainfall totals also generally set to remain light.

FranceAgriMer today cut the proportion of the French winter wheat crop rated good to very good by four percentage points to 81%. Some 23% of the French crop is now officially rated in the highest "very good" category, down from 36% at the end of May. The heat and dryness is clearly affecting wheat more than the more mature winter barley crop, for which good to very good ratings were left unchanged at 85%. Spring barley was cut to 79% good to very good from 82% a week ago, and corn was pegged at 83% in the top two categories versus 85% a week ago.

It's far from a disaster just yet, but it warrants attention, and if the current forecast verifies then further downgrades look likely over the next couple of weeks.

The 2015 French winter barley harvest is 4% done nationally, with the Poitou-Charentes region 15% done, followed by 11% of the crop in the Centre region. Around 3% if the 2015 French winter wheat crop has been cut in the Midi Pyrenees area of the country, they said, although the rest of the country is still to start.

Spanish production hopes meanwhile have gone downhill rapidly this month. Cooperativas Agro-Alimentarias pegged soft wheat output there this year down 14% at 4.92 MMT. That number is all the more startling when you consider that in May they were predicting production to rise 31% to 7.53 MMT, say Bloomberg.

The outlook for the Spanish soft-wheat crop in Castilia and Leon, the two largest growing regions, was cut to 2.27 MMT from the 3.71 MMT predicted in May, they said.

This year's Spanish corn crop is now estimated to decline 8.8% to 4.27 MMT, barley production this year is still seen rising 1.1% year-on-year to 6.69 MMT they were calling that crop as high as 8.44 MMT only a month ago.

Temperatures may near 100F (38C) in corn areas in southern France in the second half of next week, a senior meteorologist at AccuWeather told Bloomberg. The south east of the UK meanwhile could also see the mercury rise as high as 35C, next Wednesday/Thursday, some are predicting.

UK production prospects still look good, although some cereal crops on light land have started to show visual symptoms of moisture stress, said the HGCA.

Coceral today estimated the EU-28 soft wheat crop down 5.2% on last year at 140.62 MMT, with all wheat production down 4.9% at 148.22 MMT. The EU-28 barley crop was pegged down 5.8% at 56.68 MMT, with corn production seen falling 11% to 65.74 MMT. EU rapeseed production this year was forecast 11.3% lower at 21.38 MMT.

Coceral have the UK wheat crop at 14.96 MMT, down 9.4% on last year, with yields averaging 8.0 MT/ha versus 8.55 MT/ha a year ago. The UK barley crop is estimated at 6.66 MMT, down 5%, and the UK rapeseed crop was forecast at 2.27 MMT, down 9.6% compared to 2014.

In Germany, another country that has been affected by heat and dryness, soft wheat production this year was called 10.5% lower at 24.89 MMT, with barley output down 13.2% at 10.12 MMT and the rapeseed crop down 19.2% at 5.06 MMT.

In other news, Brussels granted 361 TMT worth of soft wheat export licences this week, taking the total for the season to 31 MMT, up almost 12% versus 27.7 MMT a year ago.



26 June 2015 | EU Reports
25/06/15 -- EU grains trade mostly lower. The euro is a touch weaker, with the clock ticking on a last minute deal for Greece ahead of Tuesday's $1.6 billion debt repayment due to the IMF.

At noon, Nov 15 London wheat is GBP1.20/tonne lower at GBP123.85/tonne, Sep 15 Paris was is down EUR1.75tonne at EUR182.50/tonne, Aug 15 Paris corn is down EUR1.00/tonne at EUR166.00/tonne, whilst Aug 15 Paris rapeseed is unchanged at yesterday's 14-month closing high of EUR383.50/tonne.

Agritel report that the early barley harvest in France is showing some good results in terms of both yield and quality. They do however note that, as you might expect, crop maturity was a bit further down the line for winter barley before the recent dryness and heat issues hit hardest. It may not therefore be safe to conclude that wheat will fare similarly when that harvest begins.

Talking of which, Commodity Weather Group say that July is set to begin warmer than normal across much of the continent, especially so in France and Spain where temperatures could be 3-7C above normal for the time of year.

That could add to stress in winter wheat. These warmer than normal conditions could also prevail into August, they add.

The GFS model would appear to concur with this view. That is giving 2-8C above normal temperatures for Spain, France, Germany, Poland, northern Italy and the UK in the Jul 2-10 period. It is also predicting below normal rainfall for just about everywhere with the exception of northern England and Scotland, Greece, Romania and Bulgaria.

The early 2015 harvest in Ukraine has been completed on around 20,000 ha of the 7.62 million ha of winter grains (barley), according to the Ag Ministry there. Ukraine growers are also said to have planted 803,000 ha of winter rapeseed, harvesting of which should also get underway shortly.

The National Bank of Australia said that the developing El Nino weather event could cut wheat production there to 20 MMT or less, according to a report on Bloomberg. That would be the smallest Australian wheat crop in 8 years.

It would also be far less than the 23.6 MMT currently predicted by ABARES and the USDA's recent 26 MMT estimate.

The IGC were even higher last month at 27 MMT. They are due to release their latest June estimates later today.

MDA CropCast today estimated the Australian 2015/16 wheat crop at 23.1 MMT. They also trimmed their outlook on Europe a little to 142.1 MMT, down 5% on a year ago. Other than that they made no changes to their world wheat production forecasts.

They knocked 2.8 MMT off their global corn crop estimate, with 1.5 MMT of that coming from Ukraine, where production is now seen at 24.7 MMT versus 28.4 MMT a year ago. They also pared back their view on US corn production by 1.3 MMT due to recent wetness.

Commerzbank said that they expect the pound to slowly appreciate in value against the euro, getting to 1.42 in the first half of next year, and hitting 1.45 in the second half of 2016. Essentially saying that they aren't exactly bullish on sterling, but they are less bearish on the pound than they are on the single currency. They don't see UK interest rates starting to rise until Q1 of next year.

Barclays see things happening along the same lines, but in a much quicker time frame. They predict the pound getting to 1.45 by the end of this year, and moving on to 1.47 in Q1 of 2016.



25 June 2015 | EU Reports
24/06/15 -- EU grains closed the day mostly higher, with Jul 15 London wheat up GBP0.65/tonne at GBP110.65/tonne, Sep 15 Paris was EUR0.25/tonne lower at EUR184.25/tonne, Aug 15 Paris corn was up EUR2.75/tonne at EUR167.00/tonne, whilst Aug 15 Paris rapeseed closed EUR2.00/tonne higher at EUR383.50/tonne.

For rapeseed this was the highest close on a front month since April 2014.

Oil World have trimmed back their estimate for the EU rapeseed crop by 200,000 MT to 21.8 MMT, down 10.5% on last year's production of 24.36 MMT.

They see plantings for the 2015 harvest down 3%, with yields dropping 8% to 3.33 MT/ha. The latter figure is still above the 3.28 MT/ha average suggested by the EU Commission's MARS unit on Monday. The MARS estimate would potentially cut production to below 21.5 MMT this year.

Oil World now see the German rapeseed crop down 16.8% on a year ago to 5.1 MMT, a fall of more than 1 MMT compared to last year's record.

Production in France is estimated 5.8% lower at 5.2 MMT, and Poland's crop will decline 8.2% to 2.9 MMT, they predict.

They forecast the UK rapeseed crop to fall 7.8% this year to 2.27 MMT versus their figure of 2.46 MMT for output in 2014.

There's some debate in the trade at home whether the old crop tightness seen at the end of the current season is possibly due to 2014 rapeseed production having been overestimated. With more than a GBP30/tonne premium on offer for old crop supplies over new crop, and few if any takers, that would suggest that the old crop supplies aren't really there in any volume.

Thus it would seem that UK carryover stocks into the new season will only be minimal.

The reduction in EU production this year, in contrast to good availability of soybeans, with see rapeseed command a "sizeable" premium over soybeans throughout the 2015/16 season, say Oil World.

Ukraine said that they'd now exported 33.9 MMT of grains this season, including 18.4 MMT of corn, 10.8 MMT of wheat and 4.5 MMT of barley.

Rusagrotrans said that Russia's grain exports in July would double those of June at 2.8 MMT, rising to 3.8 MMT in August as new crop material comes onto the market.

Those numbers are still some way below exports in the same period in 2014 (July 3.12 MMT and August a record 4.64 MMT) due to the fact that exporters were slow to commit to making new crop sales this year due to the on/off imposition of export duties and rouble volatility, they said.

They estimated Russia's 2015/16 full season grain exports at 31.7 MMT, including 22.1 MMT of wheat, 5.2 MMT of barley and 3.0 MMT of corn. These numbers include shipments to Kazakhstan which aren't included in official government data.

The market doesn't yet seem to be factoring in that large scale US wheat quality downgrades this year probably mean more feed grade material coming onto the market, judging by the fact that US corn prices followed wheat higher last night.

The large premium on offer for old crop UK rapeseed over new crop, aren't at all reflected in the domestic wheat market. In fact quite the opposite, with Jul 15 London wheat at a near GBP15/tonne discount to new crop Nov 15.

That won't be encouraging many to sell on the spot market, having carried their old crop this far, provided of course that they don't desperately need the space (or cash) ahead of the start of harvest 2015.

That likely means that there will be an unusually large volume of last year's production getting carried into 2015/16, continuing to weigh on the market - especially given that current sterling strength will make finding export homes a challenge once again in the new season ahead.




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