28 July 2015 | Online since 2003


EU Reports

27 July 2015 | EU Reports
27/07/15 -- Even before EU markets opened, the overnight US grains were trading heavily into the red following an 8.5% fall in the Chinese stock market - the largest one day drop since 2007 - on renewed concerns over the economy there.

With Europe now in the middle of harvesting, that was all it needed to see London and Paris grains begin the week in defensive mode.

In early trade, Nov 15 London wheat was GBP0.80/tonne lower at GBP122.50/tonne, Sep 15 Paris wheat was EUR1.50/tonne easier at EUR184.25/tonne, Aug 15 Paris corn was EUR2.50/tonne lower at EUR176.00/tonne and Aug 15 Paris rapeseed was down EUR3.75/tonne at GBP380.50/tonne.

Reuters say that the 2015 French wheat crop should come in at, or up to 1MMT above, last year's 37.5 MMT harvest despite recent dryness.

French wheat yields in the north are surprisingly good, as too are hagberg levels - unlike last year. Proteins are mixed however.

FranceAgriMer said on Friday that the French wheat harvest was 60% done as of last Monday, it's probably about 75% complete now.

The German wheat harvest is gathering pace, but with only an average crop expected, compared to last year's bumper harvest. There's "no clear picture yet" on quality, Reuters say. Agritel estimate production down 10% at 24.9 MMT.

The Polish wheat harvest is underway, but slowed by recent rain. Widespread harvesting won't begin until August though. That could come in at around 10.6 MMT, down 15% on last year, say Sparks Polska.

The UK wheat harvest is estimated around 14.5-15.5 MMT versus 16.6 MMT last year, but above the 5 year average of 14.4 MMT, Reuters say.

The UK barley harvest has now progressed north of the M62 judged by my weekend observations.

Ukraine said that it had exported 1.74 MMT of grains already this season, with a further 207,000 MT loaded and waiting to go.



27 July 2015 | EU Reports
27/07/15 -- Even before EU markets opened, the overnight US grains were trading heavily into the red following an 8.5% fall in the Chinese stock market - the largest one day drop since 2007 - on renewed concerns over the economy there.

With Europe now in the middle of harvesting, that was all it needed to see London and Paris grains begin the week in defensive mode.

In early trade, Nov 15 London wheat was GBP0.80/tonne lower at GBP122.50/tonne, Sep 15 Paris wheat was EUR1.50/tonne easier at EUR184.25/tonne, Aug 15 Paris corn was EUR2.50/tonne lower at EUR176.00/tonne and Aug 15 Paris rapeseed was down EUR3.75/tonne at GBP380.50/tonne.

Reuters say that the 2015 French wheat crop should come in at, or up to 1MMT above, last year's 37.5 MMT harvest despite recent dryness.

French wheat yields in the north are surprisingly good, as too are hagberg levels - unlike last year. Proteins are mixed however.

FranceAgriMer said on Friday that the French wheat harvest was 60% done as of last Monday, it's probably about 75% complete now.

The German wheat harvest is gathering pace, but with only an average crop expected, compared to last year's bumper harvest. There's "no clear picture yet" on quality, Reuters say. Agritel estimate production down 10% at 24.9 MMT.

The Polish wheat harvest is underway, but slowed by recent rain. Widespread harvesting won't begin until August though. That could come in at around 10.6 MMT, down 15% on last year, say Sparks Polska.

The UK wheat harvest is estimated around 14.5-15.5 MMT versus 16.6 MMT last year, but above the 5 year average of 14.4 MMT, Reuters say.

The UK barley harvest has now progressed north of the M62 judged by my weekend observations.

Ukraine said that it had exported 1.74 MMT of grains already this season, with a further 207,000 MT loaded and waiting to go.



25 July 2015 | EU Reports
24/07/15 -- EU grains closed lower across the board, both on the day and for the week.

At the close of play on Friday, Nov 15 London wheat was down GBP0.70/tonne to GBP123.30/tonne, Sep 15 Paris wheat fell a EUR0.75/tonne to EUR185.75/tonne, Aug 15 Paris corn was down EUR0.75/tonne to EUR178.50/tonne, whilst Aug 15 Paris rapeseed was EUR3.00/tonne lower at EUR384.25/tonne.

For the week that puts London wheat down GBP2.15/tonne, with Paris wheat EUR7.00/tonne easier. Paris corn lost EUR2.75/tonne during the course of the week, whilst nearby rapeseed was down EUR4.50/tonne from last Friday.

Corn came off the least worst on ideas that this is now the crop being most adversely affected by heat and dryness, in France in particular. France is of course Europe's largest corn producer.

FranceAgriMer today cut their good to very good ratings for the French corn crop by 5 points from a week ago to 62% - making for a 19 point decline in the last 3 weeks. It's also now far less than the 84% of the crop that was rated in the top two categories this time last year.

French wheat conditions were nominally left unchanged at 76% good to very good (versus 72% a year ago). Spring barley conditions were down one point in the good/very good category to 64%.

In the case of wheat I say "nominally" because 60% of the crop had already been harvested as of Monday night, up from 38% a week ago and almost double the 33% done from this time last year as the warm and dry conditions allow the combines to make rapid progress.

The French winter barley harvest was 98% done as of Monday, 6 points ahead of this time last year, and the spring barley harvest was 47% complete, up 30 points in a week and compared to only 13% this time last year.

They said that 81% of the French corn crop was at the silking stage versus 54% a week ago and 52% this time last year.

Agritel reported that reports about French wheat yields are "comforting, erasing fears linked to hot weather conditions since the end of June."

In Russia, "yields in the south of the country are generally OK, numbers for the Central district areas and the Volga are showing a big drop compared to last year. Producers in these areas are expecting yields down about 20%," they said.

The local weather centre in Siberia estimated average wheat yields in the region of around 1.2-1.4 MT/ha, which they said was somewhat lower than previously expected, although a bit better than the 5-year average for the region of only 1.24 MT/ha. Dryness and heat (with temperature of up to 37C) in June and July was the reason given for the drop compared with previously.

The Russian Ag Ministry said that the national harvest was now 15.9% complete at 27.5 MMT, with yields so far averaging 3.71 MT/ha versus 3.47 MT/ha a year ago.

Yields in the most productive Southern region (52.4% harvested) are at 4.06 MT/ha versus 3.76 MT/ha a year ago, and the North Caucasus area (68.8% harvested) is seeing average yields of 3.8 MT/ha compared to 3.69 MT/ha in 2014.

It's a different story further north though, as Agritel note. Average yields in the Central region (4.9% harvested) are only running at 3.29 MT/ha versus 3.9 MT/ha in 2014. In the Volga region, where it has been very dry, the harvest is only just getting going at 3.7% complete. Yields here are currently averaging 1.46 MT/ha compared to 2.03 MT/ha a year ago.

Things are better in Ukraine, where the national Hydrometeorlogical Centre raised their forecast for corn yields there this year from 6.0 MT/ha to 6.2 MT/ha, increasing their production forecast from 25.3 MMT to 26.5 MMT. They now expect a total Ukraine grain crop of 60.5 MMT this year.

Algeria said that they'd bought 300,000 MT of durum wheat at tender for October shipment, with 200,000 MT coming from Mexico and the rest from France.

The Hungarian Grain Association estimated their wheat crop this year at 4.5-4.7 MMT versus 5.0 MMT a year ago.

Brussels said that it had issued 325 TMT worth of soft wheat export licences this week, down from 470 TMT a week ago. Still, the total volume granted so far of 1.26 MMT is said to be the largest since 2004. It is also more than double the total released in both 2014 and 2013 at this stage.

The same is also true of barley export licences, currently at a cumulative 1.18 MMT versus 569 TMT a year ago and 447 TMT in 2013.

It's early days yet, but all that augurs well for final exports this season. Continued euro weakness will add some help.



23 July 2015 | EU Reports
23/07/15 -- EU grains closed mixed, with a bit of light consolidation in evidence following recent losses.

At the close Nov 15 London wheat was up GBP1.00/tonne at GBP124.00/tonne, Sep 15 Paris wheat was unchanged at EUR186.50/tonne, Aug 15 Paris corn was EUR0.50/tonne higher at EUR179.25/tonne, whilst Aug 15 Paris rapeseed was EUR1.25/tonne lower at EUR387.25/tonne.

The USDA's FAS estimated the EU-28 grain harvest at 305 MMT, down 6.5% from last season, although still the third highest on record.

They see wheat production here this year at 148.5 MMT, down 8.3 MMT compared with a year ago. Barley output will fall 3.0 MMT to 57.5 MMT and the corn crop will be 9.5 MMT lower at 66.0 MMT, they forecast.

They estimated EU-28 wheat exports in 2015/16 down 4 MMT to 30.5 MMT, with those of barley dropping 2.0 MMT to 7.0 MMT and corn shipments 0.5 MMT lower at 2.5 MMT.

"Weather stress in the final stages of the growing season is responsible for reduced yields. Heat wave conditions have developed in recent weeks promoting strong drying, along with sub-par rainfall. France the leading wheat country in Europe has experienced the worst decline in crop prospects from late-season weather stress," said Martell Crop Projections.

Rusagrotans cut their forecast for Russia's 2015/16 total grain exports from a previous estimate of 30-32 MMT, and last season's 31.95 MMT, to a new figure of 28 MMT.

They said that they expect final Russian wheat yields to be 8-10% lower than a year ago as the harvest progresses into some of the drier areas. The Russian Ministry said yesterday that average yields were up 6.6% so far, although this year's harvest was only 15.4% complete at the time.

Rusagrotrans trimmed their forecast for the country's 2014/15 grain ending stocks from 14.8 MMT previously to 12.3 MMT.

They see this year's harvest at 98-98.5 MMT versus 105.3 MMT in 2014.

Ukraine said that their 2015 early grain harvest was 55% complete on 5.64 million ha, producing a crop of 18.5 MMT to date. Yields are marginally ahead of a year ago at 3.27 MT/ha (3.24 MT/ha in 2014).

Growers there have cut 53% of their wheat, producing a crop of 12.78 MMT to date, with yields averaging 3.52 MT/ha. That implies a final wheat crop of just over 24 MMT, which is on a par with the current USDA prediction.

Barley output looks like being significantly higher than the USDA's 6.0 MMT though. With 66% of this year's crop harvested, the country says it has already produced 5.32 MMT, suggesting final production around the 8 MMT mark.

This isn't the case with rapeseed though. That harvest is already 71% done, producing 1.18 MMT so far, which implies total output of only 1.66 MMT versus the USDA at 1.8 MMT.

The Ukraine Ag Ministry also refined their figures for the old 2014/15 season, pegging grain exports at 35.12 MMT, which is 1.77 MMT below their previous forecast. Production last year was 63.86 MMT, they say.

Wheat exports in 2014/15 totalled 11.23 MMT, with barley at 4.49 MMT and corn at 18.88 MMT, they added.

Ukraine's 2014/15 grain ending stocks were pegged at 10.96 MMT, down 2.48 MMT from previously suggested, although up by almost a third compared to 12 months ago.



23 July 2015 | EU Reports
22/07/15 -- EU grains closed lower across the board on harvest pressure, stiff foreign competition.

Nov 15 London wheat finished down GBP0.50/tonne at GBP123.00/tonne, Sep 15 Paris wheat was EUR2.25/tonne easier at EUR186.50/tonne, Aug 15 Paris corn was down EUR1.75/tonne to EUR178.75/tonne, whilst Aug 15 Paris rapeseed was down EUR1.00/tonne to EUR388.50/tonne.

Russia's clean sweep in yesterday's GASC tender set the tone. French wheat was comfortably out-priced in that.

Reports of better than expected yields in both Russia and Ukraine, added more pressure, along with the knowledge that carryover stocks in both Europe and Russia are much larger than normal this year.

Russia said that it's 2015 harvest was now 15.4% complete at 26.6 MMT, and that yields are up 6.6% at an average of 3.7 MT/ha.

Wheat accounts for 20.5 MMT of that total, for which the harvest is now past 20% done. Wheat yields this year are said to be 5.3% higher than in 2014 at 3.79 MT/ha.

Ukraine said that it had exported 1.57 MMT of grains already so far this season. That includes 764 TMT of corn, 426 TMT of wheat and 382 TMT of barley. A further 331 TMT of grains are said to be loaded and awaiting customs clearance.

That would take total exports in July so far to over 1.9 MMT.

The wheat harvest is progressing well in France aided by fine weather, said Agritel. This, combined with a higher euro vs US dollar exchange rate, put the market under further price pressure today, they added.



22 July 2015 | EU Reports
21/07/15 -- EU grains closed mixed, but mostly a little lower, on harvest pressure and, in wheat at least, a general abundant global supply situation.

At the close Nov 15 London wheat was down GBP0.75/tonne to GBP123.50/tonne, Sep 15 Paris wheat fell a euro to EUR188.75/tonne, Aug 15 Paris corn was up EUR0.75/tonne to EUR180.50/tonne, whilst Aug 15 Paris rapeseed rose EUR2.50/tonne to EUR389.50/tonne.

Keep in mind that the USDA currently have global 2015/16 wheat ending stocks estimated at nearly 220 MMT, up 8.6% versus the season just ended. It also means that more than 30% of this year's production will still be with us unused when we enter 2016/17.

The plentiful supply line in wheat was highlighted by the latest tender from Egypt's GASC. That enquiry attracted 1.3 MMT worth of offers, which Agrimoney noted was "an unusually large amount even for the start of the season."

They finished up booking 175,000 MT of all Russian wheat for September 1-10 shipment at a little over $205/tonne including freight.

That was well below the cheapest French offer which was priced at $211 on an FOB basis (almost $229/tonne when freight is added on), and also confirms that Russian sellers are very much in the market.

Romanian wheat was also offered to GASC, but was also priced out by the Russian material.

Russian exports have been slow to get going this so far season, with Rusagrotrans today cutting their forecast for the country's July grain shipments from 2.8 MMT to 2.1 MMT, down significantly on the 3.12 MMT shipped out a year previously.

They see wheat accounting for around 1.4 MMT of that total versus 2.67 MMT a year ago, with barley exports at 450,000 MT (from 387,000 MT a year ago) and corn shipments at 130,000 MT (from 46,000 MT in July 2014).

The Russian analysts also trimmed back their forecast for August grain exports from 3.8 MMT to 3.2 MMT, down from 4.64 MMT last year.

Separately, SovEcon estimated Russia's wheat exports in July at only 1 MMT on a delay to this year's harvest and trader concerns over the new floating duty on exports.

The Russian Ag Ministry said that this year's grain harvest was 13.5% complete on 6.3 million ha (versus 9.1 million ha a year ago), producing a crop of 23.4 MMT to date (31.7 MMT a year ago), with yields at 3.7 MT/ha, up 6.3% compared to 3.48 MT/ha in 2014.

Wheat accounts for 18.3 MMT of that total, and barley a further 2.7 MMT, they said.

Similarly, Ukraine's harvest is also behind last year's pace, but yields are also said to be up versus 2014, if only slightly.

The Ukraine Ag Ministry say that the early grain harvest (excluding corn) is 41% complete on 4.22 million ha (1.4 million less than a year ago), producing a crop of 13.54 MMT so far (17.92 MMT a year ago), with yields averaging 3.21 MT/ha versus 3.19 MT/ha this time last year.

The wheat harvest in Ukraine is 37% complete at 8.8 MMT, implying a final crop of 23.78 MMT this year.

In other news, Oil World trimmed their forecast for the EU-28 oilseed rape crop by 0.5 MMT to 21.5 MMT, down nearly 12% on a year ago.



21 July 2015 | EU Reports
20/07/15 -- EU grains traded lower to start the week, in line with just about everything else.

At the close Nov 15 London wheat was down GBP1.20/tonne at GBP124.25/tonne, the contract's lowest finish in four weeks. Sep 15 Paris wheat was EUR3.00/tonne easier at EUR189.75/tonne, Aug 15 Paris corn was down EUR1.50tonne to EUR179.75/tonne, whilst Aug 15 Paris rapeseed was EUR1.75/tonne lower at EUR387.00/tonne.

The euro is off Friday's historic lows, although not by much. Some are suggesting that it's recent slump may have been a little overdone. The Greek banks have re-opened after being closed for 3 weeks, but things are far from sorted just yet.

The release of the minutes from the Bank of England's July MPC meeting are due to be issued on Wednesday, and could provide sterling with a bit more upside impetus if there's a hint of one or two members of the committee swaying towards raising interest rates.

Much of France is set to stay warmer than normal for the next couple of days, but a return to more seasonal temperatures is forecast from Wednesday onwards.

After than things could turn cooler, to much cooler than normal through to the beginning of August, not just across France but in the UK, Germany and Poland as well.

The 15 day forecast sees northern parts of France and Germany drier than normal, but with most other parts of Europe, save for the far east, getting above average precipitation for the time of year.

Ukraine's brisk start to the 2015/16 season continues, with almost 600 TMT of grains being shipped out of the country's seaports last week, according to APK Inform. That total included 138 TMT of wheat, 231 TMT of corn and 227 TMT of barley.

The country has now already exported more than 1 MMT of grains so far this month, most of which (620 TMT) has been corn.

In contrast Russia's exports have been a bit slow to get going.

The country has exported 434 TMT in the first half of the month, down 57% on a year ago and the smallest volume since 2008, say SovEcon. That includes 200 TMT of wheat, the lowest total since 2004, they say.

The slow harvest and new export tax on wheat are to blame, but exports are expected to pick up very soon, they add.

Russian grain exports via seaports last week were in fact 353 TMT, up from 143 TMT the previous week, so there's some evidence that things did indeed pick up in the second half of last week.

Most of what was shipped out last week was wheat (296 TMT).

Switching commodities, Oil World estimate the Canadian canola crop at 13.8 MMT this year, down 11.3% from 15.56 MMT a year ago and a 5-year low. Frost in May and subsequent drought are to blame, they say. The USDA estimated the Canadian crop at 14.6 MMT earlier this month.

Some private estimates place production much lower than both of these numbers.

Oil World's forecast for Canada's canola exports in 2015/16 is 7.55 MMT, down more than 1 MMT, or 12.7%, versus 2014/15. The USDA currently have these at 8.1 MMT.

With lower production and reduced exports also expected from Australia and Ukraine also this year, not to mention Europe too, things could get interesting in the second half of the season. The USDA currently estimate EU consumption at 3.3 MMT higher than production in 2015/16.



20 July 2015 | EU Reports
20/07/15 -- EU grains trade lower to start the week, in line with just about everything else.

Just after noon, Nov 15 London wheat is down GBP0.95/tonne at GBP124.50/tonne, a close there would be the contract's lowest finish in four weeks. Sep 15 Paris wheat is EUR2.25/tonne easier at EUR190.50/tonne, Aug 15 Paris corn is down EUR2.25/tonne to EUR179.00/tonne, whilst Aug 15 Paris rapeseed is EUR2.00/tonne lower at EUR386.75/tonne.

The euro is off Friday's historic lows, although not by much. Some are suggesting that it's recent slump may have been a little overdone. The Greek banks have re-opened after being closed for 3 weeks, but things are far from sorted just yet.

The release of the minutes from the Bank of England's July MPC meeting are due to be released on Wednesday, and could provide sterling with a bit more upside impetus if there's a hint of one or two members of the committee swaying towards raising interest rates.

Much of France is set to stay warmer than normal for the next couple of days, but a return to more seasonal temperatures is forecast from Wednesday onwards.

After than things could turn cooler, to much cooler than normal through to the beginning of August, not just across France but in the UK, Germany and Poland as well.

The 15 day forecast sees northern parts of France and Germany drier than normal, but with most other parts of Europe, save for the far east, getting above average precipitation for the time of year.

Ukraine's brisk start to the 2015/16 season continues, with almost 600 TMT of grains being shipped out of the country's seaports last week, according to APK Inform. That total included 138 TMT of wheat, 231 TMT of corn and 227 TMT of barley.

The country has now already exported more than 1 MMT of grains so far this month, most of which (620 TMT) has been corn.

In contrast Russia's exports have been a bit slow to get going.

The country has exported 434 TMT in the first half of the month, down 57% on a year ago and the smallest volume since 2008, say SovEcon. That includes 200 TMT of wheat, the lowest total since 2004, they say.

The slow harvest and new export tax on wheat are to blame, but exports are expected to pick up very soon, they add.

Russian grain exports via seaports last week were in fact 353 TMT, up from 143 TMT the previous week, so there's some evidence that things did indeed pick up in the second half of last week.

Most of what was shipped out last week was wheat (296 TMT).

Switching commodities, Oil World estimate the Canadian canola crop at 13.8 MMT this year, down 11.3% from 15.56 MMT a year ago and a 5-year low. Frost in May and subsequent drought are to blame, they say. The USDA estimated the Canadian crop at 14.6 MMT earlier this month.

Some private estimates place production much lower than both of these numbers.

Oil World's forecast for Canada's canola exports in 2015/16 is 7.55 MMT, down more than 1 MMT, or 12.7%, versus 2014/15. The USDA currently have these at 8.1 MMT.

With lower production and reduced exports also expected from Australia and Ukraine also this year, not to mention Europe too, things could get interesting in the second half of the season. The USDA currently estimate EU consumption at 3.3 MMT higher than production in 2015/16.



19 July 2015 | EU Reports
17/07/15 -- EU grains closed mostly lower, with only rapeseed managing to finish the day in the green. Everything ended up a net loser for the week.

Nov 15 London wheat finished down GBP1.55/tonne at GBP125.45/tonne, Sep 15 Paris wheat was EUR1.75/tonne easier at EUR192.75/tonne, Aug 15 Paris corn was down EUR1.25/tonne to EUR181.25/tonne, whilst Aug 15 Paris rapeseed was up EUR1.00/tonne to EUR388.75/tonne.

For the week that puts London wheat GBP5.85/tonne lower, for a net loss of 4.5%. In Paris, wheat lost EUR4.75/tonne, or 2.4%, corn was down EUR3.50/tonne, or 1.9%, and rapeseed fell EUR3.75/tonne, or 1%.

Continued euro weakness is fairly and squarely behind the fact that London wheat came off the worst of the bunch. The pound closed at a new highest since Nov 2007 tonight, and gained 3.4% versus the single currency in the course of the week.

The pound was helped this week by comments from BoE governor Carney that a UK base rate rise could be on the cards "around the turn of the year".

Euro weakness will certainly be helping exports on the continent, with reports emerging this week that French wheat had been sold to Mexico, despite an abundance of wheat for sale in neighbouring USA. Algeria are said to have bought 250 TMT of soft milling wheat in a tender for 50 TMT for October shipment. It is thought that France will be the most likely supplier of that too.

Brussels announced last night that they'd issued 470 TMT worth of EU soft wheat export licences this past week, up a little on 467 TMT the previous week, taking the total for the only 2-weeks old new 2015/16 season to 937 MMT, which is almost 50% more than the US has reported in the same period.

The recent dryness and heat in France has accelerated the pace of the 2015 harvest, minimising the weather risk to winter planted grains at least.

FranceAgriMer said that the French winter wheat harvest had moved on to 38% complete as of Monday, up from 15% done a week previously and versus only 4% this time last year.

Agritel say that early French wheat cuts are displaying "rather satisfying results".

The French winter barley harvest is probably now complete, it was already 96% done as of Monday, up from 85% the previous week and compared to only 75% harvested a year ago. Spring barley is 17% harvested, up from 3% a week ago and versus only 1% done this time last year.

Winter wheat crop conditions were rated unchanged on a week ago at 75% good to very good (versus 72% a year ago), spring barley conditions fell one point to 65% (now also a point behind this time last year). Corn ratings fell from 71% good to very good to 67%, well behind 84% a year ago, as that crop now bears the brunt of the current prevailing weather conditions. The crop is said to be 54% silking versus only 22% a year ago.

The HGCA said that the less advanced German wheat crop is now under more threat from the weather than the French crop. Strategie Grains this week revised potential German wheat yields down from 7.98 MT/ha to 7.70 MT/ha. Coceral have them even lower at 7.55 MT/ha, down 12.5% on a bin-busting 8.63 MT/ha a year ago.

Ukraine say that their 2015 early grain harvest (which excludes corn) is 31% complete versus 47% done this time a year ago. That's produced a crop of almost 10 MMT so far versus 14 MMT a year ago. Average yields are said to be 3.15 MT/ha compared to 3.06 MT/ha at this time in 2014.

The wheat harvest is 26% done producing 6 MMT to date, which implies a final crop of around 23 MMT versus the USDA's 24 MMT estimate and compared to 24.75 MMT a year ago. The Ukraine barley harvest is 50% complete, producing 3.7 MMT to date, implying final production of around 7.4 MMT, which is far higher than the USDA's current 6.0 MMT prediction.

The Ukraine rapeseed harvest is said to be 17% complete, producing 232 TMT of the oilseed to date. That only suggests a final crop of 1.36 MMT this year, versus a USDA forecast of 1.8 MMT and 2.2 MMT a year ago. It's unclear however if the figures from the Ag Ministry include, or exclude, spring rapeseed plantings.



17 July 2015 | EU Reports
16/07/15 -- EU grains closed higher, although fairly well off the intra-day highs, reversing most of yesterday's losses.

At the close Nov 15 London wheat was up GBP1.25/tonne to GBP127.00/tonne, Sep 15 Paris wheat was EUR3.25/tonne higher at EUR194.50/tonne, Aug 15 Paris corn was up EUR3.75/tonne to EUR182.50/tonne, whilst Aug 15 Paris rapeseed was EUR2.75/tonne firmer at EUR387.75/tonne.

Another round of very warm weather is on the cards from France this week, with temperatures forecast to hit 40C in some parts of the country today. Rapid harvest progress should have been made there when FranceAgriMer report on that tomorrow. The heat could certainly now be causing some problems for pollinating corn.

Strategie Grains cut their forecast for the EU-28 soft wheat crop from 141.6 MMT to 140.9 MMT, having already knocked a million tonnes off last month's estimate due to heat and dryness issues. They also trimmed their EU corn production estimate by 0.8 MMT to 66.7 MMT.

French markets are supported by the ever weakening euro, as traders keep an eye on developments in Greece, who have apparently been granted an EUR7 billion bridging loan to keep their finances afloat until their bailout is arranged.

Comments from the IMF that the country can obtain debt sustainability only through extensive debt relief that is "far beyond what Europe has been willing to consider so far" hardly inspires confidence, and look like keeping the euro under pressure for some time yet.

The pound is up to its best level against the single currency since November 2007 today, also helped by the news from yesterday that wage growth in the UK accelerated at the fastest pace in 5 years in the last quarter.

Barclays predict the euro falling to 69 pence by the end of the year (although it's looking like it might get there a lot sooner than that to me), and 68 pence in Q1 of 2016. It will also slip to parity with the US dollar, and then below it to 0.98 in the same two periods, they say.

That should continue to support the grain markets on the continent relative to those in the UK, although it would also be a bit more friendly for UK wheat than it would be for US material, which is already struggling to compete on the export market.

It is also something to bear in mind for those growers in the UK relying on the Single Farm Payment System to bail them out later this year.

Better than expected harvest results keep being reported out of Russia. The Ag Ministry there say that the 2015 harvest is now 10.1% complete on 4.7 million ha, a million ha less than this time last year. Production currently stands at 17.6 MMT versus 20.1 MMT a year ago. Yields are reportedly averaging 3.74 MT/ha, up 5% on a year ago.

Wheat accounts for 3.2 million ha of the area harvested, or 12% of plan, producing 12.1 MMT with an average yield of 3.78 MT/ha versus 3.62 MT/ha in 2014 at this stage.

The Southern District is 34.3% harvested and the North Caucasus region is 46.7% done, they say.

The Ukraine State Stats Service said that the country's Jul 1 grain stocks were up 12.9% on a year ago at 7.9 MMT, despite record exports in 2014/15. That included 3.2 MMT of wheat, 1.5 MMT of barley and 2.9 MMT of corn.

They've hit the ground running with exports in the new 2015/16 season, and these extra carryover stocks will stand them in good stead to continue in that vein at least through to Christmas.

Morocco said that they'd bought 175,000 MT of wheat on the domestic market for their state-subsidised bread programme.




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