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27 June 2016 | Online since 2003
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EU Reports

25 June 2016 | EU Reports
24/06/16 -- EU grains finished mixed, and in fact mostly a bit higher despite the shock UK "leave" vote on Europe.

The day ended with Jul 16 London close up GBP4.50/tonne at GBP109.00/tonne, Sep 16 Paris wheat was up EUR1.25/tonne at EUR160.25/tonne, Aug corn was EUR10.75/tonne lower at EUR175.25/tonne and Aug 16 rapeseed was down EUR4.25/tonne to EUR352.00/tonne.

The UK referendum vote took the market by surprise, sending the pound tumbling to levels not seen since the 1980's against the US dollar and a one-year euro low also. The euro itself was weakened by the news, which may explain some of the strength displayed in Paris grains later in the day.

Some of that may also come from a continuation of the decline in French crop conditions as seen by FranceAgriMer. They cut good to very good French winter wheat ratings 4 percentage points today, down to 71% from 75% a week ago and versus 81% this time last year.

Winter barley conditions fell even more, down 6 points to 67% good to very good, and compared to 85% this time last year. Corn conditions were down 4 points to 69% (83% last year).

Few saw the UK referendum result coming, with 6/1 apparently available with the bookies for a successful "leave" vote as lat as 11pm Thursday night.

So, where do we go from here?

"Currency volatility has been a trend throughout most of this season and one of the main factors driving markets," say the HGCA. "It is likely that this volatility will continue in the short-medium term and therefore the importance of keeping an eye on markets has never been so essential," they add. Wise words.

A weak sterling, and euro, won't harm exports. These are already only 1% behind last year's record levels at 30.66 MMT for soft wheat, including the latest 556,000 MT worth added this week.

It should also help keep out cheap foreign imports of corn, spurring more consumer demand for feed wheat. At least that's the theory.

Despite having the strongest case from a fundamental supply and demand viewpoint rapeseed continues to fall, following soybeans and palm oil for now.



24 June 2016 | EU Reports
24/06/16 -- EU grains finished lower Thursday on nervousness ahead of the UK Brexit referendum vote.

The day ended with Jul 16 London close down GBP1.50/tonne at GBP104.50/tonne, Sep 16 Paris wheat was down EUR2.50/tonne at EUR159.0/tonne, Aug corn was EUR1.00/tonne easier at EUR176.00/tonne and Aug 16 rapeseed was down EUR2.75/tonne to EUR356.25/tonne.

As I write this the morning after the night before, the market was wight to be nervous, and the bookies were wrong to be offering 3/1 about a successful "Leave" vote over "Remain", with the former claiming a 52:48 point win.

Cameron has decided that he can't really continue to lead a country out of Europe that he so vehemently campaigned to stay in, and will step down by October.

The pound has crashed below 1.40 - to levels not seen since 1985 - against the dollar this morning, having closed at 1.50 last night. It is also sharply lower against the euro.

In theory that should provide some support for London wheat as it improves our export competitiveness. Last night's close in London was the lowest for a front month since April.

The news is bearish for grains in general though, and the overnight Globex market is a sea of red this morning. Change is one thing that commodities don't like, and this certainly falls under that category heading that's for sure.



23 June 2016 | EU Reports
22/06/16 -- EU grains closed mostly lower, with Jul 16 London wheat closed unchanged at GBP106.00/tonne, Sep 16 Paris wheat was EUR1.00/tonne weaker at EUR161.50/tonne, Aug corn closed EUR1.75/tonne lower at EUR177.00/tonne and Aug 16 Paris rapeseed closed EUR0.75/tonne weaker at EUR359.00/tonne.

The market seems a bit more relaxed about the UK referendum tomorrow, and confidence is growing that the "stay" vote will prevail, preventing a drop in value of sterling and a commodity sell-off.

Algeria were reported as buying 500,000 MT of optional origin milling wheat in their tender, with Baltic supplies getting a mention as being some of the cheapest offered.

Jordan are back in the market for 100,000 MT each of milling wheat and feed barley.

The results of the UK referendum are expected "around breakfast time" Friday morning, according to the BBC.

According to the oddschecker website the bookies are lining up around 3/1 against a "Leave" vote being successful and around 1/4 for a "Remain" vote to win the day.

A "Remain" win could see further sterling appreciation which might harm London wheat prices further.



22 June 2016 | EU Reports
21/06/16 -- EU grains closed lower across the board, with Jul 16 London wheat down GBP1.10/tonne at GBP106.00/tonne, Sep 16 Paris wheat falling EUR1.75/tonne at EUR162.50/tonne, Aug corn was EUR4.25/tonne lower at EUR175.25/tonne and Aug 16 rapeseed was down EUR7.25/tonne to EUR359.75/tonne.

This was the lowest close for London wheat since Jun 1, and in Paris it was a match for the lowest wheat close since May 19.

A growing belief that the UK will vote to remain in Europe on Thursday is calming a few nerves, seeing sterling stabilise, and bringing back a bit more willingness for investors to take a risk on commodities.

Ever-nearing harvest pressure outweighs concerns over French crop conditions. Sharply weaker US corn prices today were a negative for feed wheat, as well as corn.

A Reuters survey estimated the French soft wheat crop at 37.5-38.5 MMT versus 41 MMT last year, reflecting reduced yields due do pests and disease damage because of persistent wet weather.

On Monday, MARS pegged French yields at 7.32 MT/ha, down 6% versus 7.79 MT/ha a year ago. The French Ministry however estimate plantings this year to be up on 12 months ago and at the highest levels since before World War 2.

That, combined with the old adage that rain makes grain, might temper production losses - meaning that it is quality not quantity that is compromised. I'd plump for a French crop of closer to 39.5 MMT this year.

Germany has seen some of the wetness that has afflicted most of France in southern areas, but has been dry in the north. The German farm cooperative currently estimate overall production down 2.9% at 25.77 MMT.



20 June 2016 | EU Reports
20/06/16 -- EU grains finished mixed, with Jul 16 London close down GBP1.85/tonne at GBP107.85/tonne, Sep 16 Paris wheat was up EUR1.25/tonne at EUR164.25/tonne, Aug corn was EUR1.75/tonne lower at EUR179.50/tonne and Aug 16 rapeseed was up EUR0.75/tonne to EUR367.00/tonne.

MARS lowered their forecast for total EU-28 soft wheat yields this year from a previous 6.11 MT/ha to 6.07 MT/ha, "the downward revision for Germany and France was not completely compensated by the upward revision for Spain, Italy and Portugal," they said.

French yields were pegged at 7.32 MT/ha, down 6% versus 7.79 MT/ha a year ago, although still slightly above the 5-year average of 7.20 MT/ha. UK average yields were estimate down 10% year-on-year at 8.09 MT/ga, although again this is still above the 5-year average of 7.89 MT/ha.

In France, winter barley yields are seen falling 5.4%, with those of spring barley down 2.9%. UK barley yields are forecast 10.1% and 5.6% lower respectively.

Spain is one of the stand-out gainers this year, with wheat yields up more than 20%, and barley yields rising nearly 40% compared to last year.

French rapeseed yields are estimated 8.6% lower this year, with the UK down 0.5%, Germany up 3.8% and Poland 12.6% lower.

South Korea were said to have purchased 112,000 MT of probably EU feed wheat for Aug/Sep shipment. Saudi Arabia bought 315,000 MT of 12.5% hard milling wheat, believed by many to be German/the Baltic/Polish origin for September delivery.

Jordan tendered for 100,000 MT of option origin milling wheat.

Russian seaports grain exports dwindled to only 51,500 MT last week, customs data shows. Ukraine's were much better at 445,800 MT, including 331,500 MT of wheat.

Still, Russia's Jul 1 to Jun 15 total grain exports are up 12% at 33.28 MMT., That total includes 24.11 MMT of wheat, 4.22 MMT of barley and 4.62 MMT of corn.

IKAR estimated on Friday that Russia would produce another record grain crop in 2016.



20 June 2016 | EU Reports
17/06/16 -- EU grains closed mixed, but lower for the week.

At the finish front month Jul 16 London wheat closed up GBP0.40/tonne at GBP108.95/tonne, Sep 16 Paris wheat was EUR0.50/tonne steadier at EUR163.00/tonne, Aug corn closed EUR1.25/tonne lower at EUR181.25/tonne and Aug 16 Paris rapeseed closed EUR2.00/tonne weaker at EUR366.25/tonne.

For the week that puts London wheat GBP2.65/tonne lower, with Paris wheat down EUR5.50/tonne, corn falling EUR4.75/tonne and rapeseed ending EUR13.00/tonne easier.

Fresh news is lacking, and the impending arrival of harvest 2016 seems to be enough to keep prices on the defensive even if there are one or two bullish news items out there.

The state of the French crop is one such item, with FranceAGriMer again downgrading crop ratings, this time by 3 percentage points to 75% good to very good (85% a year ago). Spring barley conditions were cut 5 points in the top two categories to 86% and corn ratings fell 2 points to 73%.

They said that the entire French winter wheat crop is now heading, along with 77% of the spring barley. Corn sowing is 99% complete, with the crop 98% emerged and 65% of it having six visible leaves.

Brussels reported 869 TMT worth of export licences being granted last week. That was far better than the 374,000 MT released the previous week.

Saudi Arabia are in the market for hard wheat over the weekend. with the results expected Monday. German wheat may stand a good chance of picking up at least some of that business.

Next week could be nervous with the UK Brexit vote on Thursday. The stay campaign has nudged into a narrow lead, according to the latest press releases.

It wouldn't be a surprise to see the pound do something dramatic Friday/the following week following the result of that.

IKAR said that Russia could produce a post-Soviet era record 108.8 MMT of grain this year, including a record 64.5 MMT of wheat.

A record Russian crop is rarely good news for arable farmers elsewhere.



20 June 2016 | EU Reports
17/06/16 -- EU grains closed mixed, but lower for the week.

At the finish front month Jul 16 London wheat closed up GBP0.40/tonne at GBP108.95/tonne, Sep 16 Paris wheat was EUR0.50/tonne steadier at EUR163.00/tonne, Aug corn closed EUR1.25/tonne lower at EUR181.25/tonne and Aug 16 Paris rapeseed closed EUR2.00/tonne weaker at EUR366.25/tonne.

For the week that puts London wheat GBP2.65/tonne lower, with Paris wheat down EUR5.50/tonne, corn falling EUR4.75/tonne and rapeseed ending EUR13.00/tonne easier.

Fresh news is lacking, and the impending arrival of harvest 2016 seems to be enough to keep prices on the defensive even if there are one or two bullish news items out there.

The state of the French crop is one such item, with FranceAGriMer again downgrading crop ratings, this time by 3 percentage points to 75% good to very good (85% a year ago). Spring barley conditions were cut 5 points in the top two categories to 86% and corn ratings fell 2 points to 73%.

They said that the entire French winter wheat crop is now heading, along with 77% of the spring barley. Corn sowing is 99% complete, with the crop 98% emerged and 65% of it having six visible leaves.

Brussels reported 869 TMT worth of export licences being granted last week. That was far better than the 374,000 MT released the previous week.

Saudi Arabia are in the market for hard wheat over the weekend. with the results expected Monday. German wheat may stand a good chance of picking up at least some of that business.

Next week could be nervous with the UK Brexit vote on Thursday. The stay campaign has nudged into a narrow lead, according to the latest press releases.

It wouldn't be a surprise to see the pound do something dramatic Friday/the following week following the result of that.



17 June 2016 | EU Reports
16/06/16 -- EU grains closed mostly weaker for a third day, with with Jul 16 London wheat down GBP0.90/tonne at GBP108.55/tonne, Sep 16 Paris wheat falling EUR1.75/tonne at EUR162.50,tonne, Aug corn was EUR3.00/tonne lower at EUR182.50/tonne and Aug 16 rapeseed was down EUR5.00/tonne to EUR364.25/tonne.

US gains were red across the board, and that sentiment spilled over into European trade.

Yet again fresh news was lacking, and down seems to be the route of least resistance.

Saudi Arabia tendered for 300,000 MT of hard wheat. with the results expected over the weekend. Algeria were said to have bought 150,000 MT of optional origin wheat for Aug/Sep shipment.

Egypt may soon return to the market, having bought 5 MMT domestically in recent months from their newly harvest 2016/17 crop, say the HGCA.

Wet weather continues across France and most of central Europe. Rain makes grain is the old adage, so yields could be bumper this year, but what about quality? Is France in for an abundance of low-quality wheat, much as we saw a couple of years ago?

Only time will tell, but it certainly looks to be a possibility.

The Spanish Association of grain traders said that they expect yields to be significantly higher this year, with winter wheat production forecast 33.9% higher at 7.26 MMT. Barley output is seen rising even more - up 61% to 10.3 MMT.



16 June 2016 | EU Reports
15/06/16 -- EU grains finished in the red across the entire board in Paris, with London wheat unchanged. Jul 16 London close flat at GBP109.45/tonne, Sep 16 Paris wheat was down EUR1.75/tonne at EUR164.25/tonne, Aug corn was EUR0.50/tonne lower at EUR185.50/tonne and Aug 16 rapeseed was down EUR5.00/tonne to EUR372.25/tonne.

Weaker US markets, pre-harvest pressure and nervousness ahead of next week's UK referendum vote encouraged a bit of selling.

Fresh news was generally lacking.

Worries over the quality of this year's French wheat crop are keeping a floor in the market for the time being, at least until more is known once the harvest commences.

As the search for foreign wheat homes continues, Reuters reported that the French port of Dunkirk was this week loading 66,000 MT of wheat for Vietnam - the first such sale in 25 years.

The HGCA noted that "rapeseed is still not in control of its own destiny" saying it's fortunes are closely aligned to those of palm and soybeans. US beans were down today, and rapeseed followed suit despite strong underlying fundamentals.

Russia reported spring wheat plantings fully complete, with barley past 96% done and corn sowings on 93%.



15 June 2016 | EU Reports
14/06/16 -- EU grains mostly lower as the 2016 harvest nears and the nearing Brexit referendum nears causing some "risk off" mentality.

Front month Jul 16 London wheat closed down GBP2.30/tonne at GBP109.45/tonne, Sep 16 Paris wheat was EUR3.75/tonne easier at EUR165.50/tonne, Aug corn closed EUR1.75/tonne lower at EUR186.00/tonne and Aug 16 Paris rapeseed closed EUR2.75/tonne weaker at EUR377.25/tonne.

Fresh news was lacking and the market is conscious that new crop will soon be upon us. Whilst Europe may have made sterling efforts to shift last season's crop, carryover into 2016/17 remains much larger than normal.

Excessive wetness concerns in France add support for now, at least until the harvest there begins and we get some firm reports on yields from the field. Rains are persisting in the northern parts of France.

Russia said that they'd planted 13.6 million ha of spring wheat, which is 103.2% of the original Ministry forecast. Production forecasts their this year are creeping higher.

Spring barley planting is said to be 96.1% done on 7.8 million ha.

Russian customs data shows that they exported 13.436 MMT of grains Jan 1 to Jun 14 this year, of which 56% (7.73 MMT) was wheat.

That takes grain exports since the start of the season to 36.35 MMT, of which wheat accounts for 66% (23.79 MMT).

Rains in Australia are strengthening the prospect of a good harvest there for 2016/17. with Abares now calling their wheat crop at 25.4 MMT vs the 24.5 MMT previously expected.

The reduced their canola production estimate from 3.27 MMT to 3.2 MMT.




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