The day ended with Nov 14 London wheat up five pence at GBP121.80/tonne, Nov 14 Paris wheat was EUR0.75/tonne lower at EUR174.25/tonne, Nov 14 Paris corn was down EUR0.50/tonne EUR151.75/tonne and Nov 14 Paris rapeseed was EUR4.75/tonne lower at EUR323.75/tonne.
For the week that puts London wheat 45 pence lower, Paris wheat 50 euro cents higher, and corn and rapeseed both one euro lower.
So, support at GBP120/tonne and EUR170/tonne in London and Paris wheat is still holding, at least for now. The next big test might come when the 2014 EU and corn harvest begins and when the weight of new crop corn offers out of the Black Sea comes around. The corn harvest is just getting going in Ukraine and Russia.
The best hope as far as significant upside potential goes is unfortunately in the hands of Vladimir Putin it would seem.
The world 2014 wheat and corn crops meanwhile keep getting bigger. The International Grains Council today raised their forecast for global wheat output this year by 11 MMT from last month to a 2013 record equalling 713 MMT. They also added 5 MMT to their corn production estimate, pegging this year's crop at 973 MMT.
The rise in wheat production from that forecast last month was largely due to a 5 MMT increase for Russia, where the crop is now seen at 60 MMT, up 15% on last year. There was also a 3.8 MMT hike for production in Europe, taking output this year to 150.8 MMT, a more than 5% rise compared to last year.
Significantly too, Europe's 2014 corn crop was also raised from 66.4 MMT to 67.8 MMT, a near 6% increase on a year ago.
Russia said that it had now harvested 73.8 MMT of grains so far this year off only 55% of the planned area. Yields are up 18.6% versus 12 months ago. Wheat accounts for 47.2 MMT of that total off 56% of the intended area, with barley adding a further 16.7 MMT.
At home, the HGCA said that the 2014 UK harvest was around 80% done, up from 66% complete a week ago. Wheat is around 75% harvested, with yields so far averaging 8.3-8.6 MT/ha. With a planted area of just under 2 million hectares this year, that potentially could take this year's crop close to the 17 MMT mark.
The warm and dry forecast for the week ahead should enable further good harvest progress to be made.
FranceAgriMer said that the French wheat harvest was just about complete at 99% done as of Monday, and that the 2014 spring barley harvest is now over. They left their estimate for corn crop conditions unchanged at 86% good to very good, up sharply from 55% this time last year.
The day closed with Nov 14 London wheat up GBP1.30//tonne to GBP121.75GBP/tonne, Nov 14 Paris wheat ended EUR1.50/tonne higher at EUR175.00/tonne, Nov 14 Paris corn was up EUR0.75/tonne at EUR152.75/tonne, whilst Nov 14 Paris rapeseed was EUR2.75/tonne firmer at EUR328.50/tonne.
Using the most evocative language he could think of, the Ukraine PM said that Russia had "unleashed a war in Europe" in what looks like a clear plea for help from the West. How this all pans out remains to be seen, but the possibility of further sanctions against Moscow can't be ruled out, although what form these might take is anybody's guess. The uncertainty of it all is probably enough to encourage some to think that the safest place to be right now isn't short of wheat, even if global production this year is to be at, or close to, record levels.
MDA CropCast today raised their forecast for EU-28 wheat production by 510 TMT from last week to 145.29 MMT on the back of improved yield estimates for the UK, without telling us specifically what that estimate was.
Brussels said that they'd issued 653 TMT of soft wheat export licences this past week, taking the 2014/15 seasonal total to date to 3.8 MMT. They also granted 122 TMT worth of barley exports, taking the cumulative total so far to 1.5 MMT.
In addition to that they authorised 164 TMT worth of wheat imports from Ukraine, under the existing preferential duty free tariff agreement that is in place until the end of October. The remainder of that 950 TMT quota is now less than 20 TMT, and is likely to be zero by next week. Ukraine's duty free corn quota has already been filled.
Ukraine said that they'd exported 4.5 MMT of grains so far this marketing year, including 2.4 MMT of wheat, 1.7 MMT of barley and 377 TMT of corn.
Morocco said that it's harvest was over, producing 5.1 MMT of wheat and 1.7 MMT of barley. For wheat that's a 27% decline on last year, although that number is actually 400 TMT more than the current USDA estimate. For barley it represents a 37% decline versus 2013, although it's very similar to the existing USDA forecast of 1.75 MMT.
Interestingly, despite the sharp fall in wheat production this year the USDA only has Morocco down to import 3 MMT of wheat in 2014/15 versus 3.9 MMT in 2013/14. Barley imports are forecast to rise from 500 TMT to 600 TMT.
The day ended with Nov 14 London wheat down GBP0.15/tonne at GBP120.45/tonne, Nov 14 Paris wheat was up EUR0.75/tonne at EUR173.50/tonne, Nov 14 Paris corn was up EUR0.50/tonne from last night's more than 4-year low to EUR151.50/tonne and Nov 14 Paris rapeseed rose EUR1.50/tonne to EUR325.75/tonne.
The head of the Russian Grain Union, who often err on the cautious side with their production estimates, said that the country's 2014 grain harvest could beat the current post Soviet era record of 108 MMT set in 2008/09. At the very least the harvest had a very good chance of being the second largest since the break up of the old Soviet Union, he said. Wheat production this year will come in at around 60 MMT, he forecast.
Exports in 2014/15 would be a minimum of 30 MMT, he added. The Russian Ag Ministry yesterday raised their forecast for these to 27.5-30.0 MMT from a previous forecast of 25-27 MMT. Anything in excess of 27.02 MMT would also constitute a record.
Rusagrotrans forecast Russia's August grain exports at a record 4 MMT. Wheat production this year would reach 57.9 MMT, an 11% rise on last year, with barley output up more than 29% to 19.9 MMT, they said.
The 2014 Russian grain harvest currently stands at 72.9 MMT off 54% of the planned area. Wheat accounts for 46.9 MMT of that total off 55.3% of plan, with barley adding a further 16.5 MMT off 67.9% of the forecast area.
Ukraine said that they'd harvested 35.2 MMT of early grains, which excludes corn, off 9.6 million hectares. That total includes 24.4 MMT of wheat and 9.3 MMT of barley.
APK Inform said that Ukraine's seaports had exported 589.2 TMT of grains in the week through to Aug 24, down fractionally on 595.8 TMT a week previously, but a very respectable total nevertheless. Certainly the fighting in the east doesn't appear to be having any effect on exports at the moment. Last week's total included 461.7 TMT of wheat and 123.4 TMT of barley.
The USDA's FAS said that Canada would harvest a fraction under 28 MMT of wheat this year, which is a bit more than the 27.7 MMT forecast by Stats Canada late last week, although 25% down on last year's record crop. Exports will only fall 6% to 21.5 MMT in 2014/15 however, aided by a weak Canadian dollar, they said.
Their equivalent in Europe forecast the wheat crop here at a near record 148.5 MMT, up more than 3% on last year's 144 MMT. They also estimated the EU-28 barley crop at 6.5 MMT, a more than 5% decline on last year when an unusually large area of spring barley was planted. The quality of this year's barley crop is quite high despite rain at harvest time, they said. Corn production will rise nearly 4% to 67.5 MMT this year, they added.
Despite the higher production numbers, wheat exports in 2014/15 will fall more than 21% to 25 MMT, they forecast.
The day ended with Nov 14 London wheat down GBP2.40/tonne at GBP120.60/tonne, Nov 14 Paris wheat was EUR0.75/tonne lower at EUR172.75/tonne, Nov 14 Paris corn was down EUR1.00/tonne EUR151.00/tonne and Nov 14 Paris rapeseed was EUR2.75/tonne higher at EUR324.25/tonne.
Egypt's GASC bought 175 TMT of Russian/Romanian wheat for late September shipment in a tender, with Russian origin getting the lion's share. French wheat was offered, but was out-priced, although not by much based on the cheapest price on the table. All in there were four French cargoes offered, that might be a sign that all is not completely lost with regards to the quality of this year's crop there.
Ukraine wheat wasn't offered, reinforcing the view that the quality of their crop this year isn't great. Some early season sales were made to Egypt, but what had been shipped so far is said to be disappointing in terms of both hagberg and gluten levels.
The Ukraine Ministry said that the country's wheat harvest was now 99% complete, producing a crop of 24.4 MMT so far in bunker weight, versus a clean weight harvest of 22.3 MMT last year. Estimates on how much of this year's crop will only be suitable for feed vary to anywhere from 40-70% compared to around 25% last year. Certainly that means that there will be a lot more Ukraine feed wheat looking for a home this year. That could put some further downwards pressure on the London market, especially when the EU and Ukraine 2014 corn harvest gets underway.
Russia said that their 2014 grain harvest had reach 72.3 MMT, including 46.7 MMT of wheat. The Ministry raised their grain export forecast again today, now projecting foreign sales at 27.5-30.0 MMT, which would potentially beat the 2011/12 record of 27.02 MMT. Weakness of the Russian rouble and strong demand for what is essentially the cheapest quality wheat in the world at the moment is keeping local prices fairly well supported. Russian farmers seem to be reasonably keen to accept these levels to fund their autumn planting program and settle their debts.
Russia is said to be to discuss a deal with Iran to swap wheat for oil next month.
Algeria meanwhile said that it would not accept wheat of mixed origin against any of its tenders. They would normally buy most of their wheat requirements from France, who have reportedly been importing milling wheat from the UK and Lithuania in the past couple of weeks. It's market conjecture that these imports have been made with a view to blending them with some of this year's inferior quality French wheat to "up the spec" for wheat to be exported to homes such as Algeria.
Driving around South Yorkshire and Lincolnshire yesterday it was apparent that there's still a fair bit of wheat left to harvest in the region, maybe 15-20% or so at a guess. This isn't a huge corn growing region, but what was on display looked to have excellent potential.
The day ended with Nov 14 Paris wheat ended EUR0.25/tonne lower at EUR173.50/tonne, Nov 14 Paris corn was down EUR0.75/tonne at EUR152.00/tonne, whilst Nov 14 Paris rapeseed was EUR3.25/tonne lower at EUR321.50/tonne.
Fresh news was relatively thin on the ground, and US grain markets were mostly in the red, save for the continued early strength displayed in the nearby soybean and meal contracts. Somebody suddenly pulled the plug on even that in late afternoon trade.
Cheap and cheerful Romania said that they'd harvested a record wheat and rapeseed crop this year, putting production of the former at 7.4 MMT and the latter at 1.1 MMT.
The EU Commission's MARS unit said that "the overall forecasted EU-28 cereal yield for 2014 remains favourable, at the level of last year and above the last five years’ average (+6.1%). Yield prospects for grain maize are excellent at the moment."
They forecast the EU-28 2014 soft wheat yield at 5.85 MT/ha, up from 5.8 MT/ha a month ago and 5.1% above the 5-year average. The EU-28 barley yield was estimated at 4.61 MT/ha versus 4.54 MT/ha last month and 2.7% above the 5-year average. Corn yields this year were now placed at 7.53 MT/ha versus 7.23 MT/ha in July and 11.1% ahead of the 5-year average.
"Large parts of Europe, from France to south-western Romania, experienced exceptionally high rainfall levels. Although this led to a slowing down and interruption of harvesting activities, the negative impact on winter and spring cereals was limited, with severe problems only occurring locally," they observed.
"Conditions for summer crops are good to excellent in most of Europe. Near-average temperatures and the humid weather have boosted the growth of summer crops, especially for maize," they added.
For the UK specifically they forecast 2014 wheat yields at 8.24 MT/ha, up from 8.13 MT/ha a month ago, 11.6% up on last year and 10% above the previous 5-year norm. Barley yields were estimated at 5.81 MT/ha, unchanged on last month and marginally down on 5.85 MT/ha a year ago, if a fraction above the 5-year average.
The average UK rapeseed yield this year was estimated at 3.81 MT/ha, also the same as last month, 28.1% up versus last year and 11.4% up compared to the preceding 5-year average.
Russia said that it had now harvested 71.5 MMT of grains off 52.3% of the planned area. That total includes 46.2 MMT of wheat off 53.8% of plan, with average yields up 18.5% at 3.39 MT/ha. They've also harvested 15.9 MMT of barley off 65% of the intended area.
In addition the first few thousand hectares of this year's corn crop have now been harvested. Early yields are up 22.3%, although this is only off less than 1% of the planned area.
Russia said that it had already exported 5.857 MMT of grains this season (Jul 1 - Aug 20), a 22.7% increase on this time a year ago. That total consists mostly of wheat (5.148 MMT), with a smaller volume of barley (633 TMT) and a bit of corn (51 TMT) and other crops.
The Russian Ag Min last week raised their forecast for 2014/15 total grain exports to 25-27 MMT.
Ukraine said that it had exported a little over 4 MMT of grains so far this season (to Aug 22), including just over 2 MMT of wheat, more than 1.5 MMT of barley and 373 TMT of corn.
Oil World raised it's forecast for world 2014/15 oilseed production from 505 MMT to 507.2 MMT, which is 3.7% up versus 2013/14. They see the global soybean crop at 306.7 MMT, and the world rapeseed crop at 68.7 MMT. Soybean consumption in 2014/15 was estimated at 290.2 MMT, with that of rapeseed outstripping production slightly at 69 MMT.
The diary for the week ahead doesn't contain anything that looks too exciting. The USDA will report on the latest US crop conditions and spring wheat harvest progress tonight. Thursday brings the usual weekly export sales report, and the IGC are out on Friday with their monthly report.
In outside news, the BBC report that Russia are to send another "aid" convoy into Ukraine within days. That could add a bit more unpredictability to the markets this week.
The day ended with Nov 14 London wheat up GBP1.40/tonne at GBP122.25/tonne, Nov 14 Paris wheat was up EUR2.25/tonne at EUR173.75/tonne, Nov 14 Paris corn was down EUR0.50/tonne at EUR152.75/tonne and Nov 14 Paris rapeseed rose EUR1.25/tonne to EUR324.75/tonne.
Despite the generally higher close there wasn't a great deal of change for the week, with London wheat GBP0.85/tonne lower, Paris wheat unchanged, corn down EUR1.75/tonne and rapeseed up EUR3.00/tonne.
For the London market in particular the trade is still awaiting a clearer idea on UK production this year, with some estimates as high as 17 MMT, which would be the second largest crop on record. This week's yield estimate from the HGCA however suggests that 16 MMT may be closer to the mark.
That's still not a bad return, and equates to a lot of feed wheat looking for a home, especially with the anticipated much larger EU feed wheat crop on the way and a big corn crop coming too.
For now though the market seems to have found it's level, and has managed to resist a fall below GBP120/tonne. The next big test to see if it can hold that price could come when new crop corn comes along.
We've seen a touch of sterling weakness of late too, which may be helping London wheat a little. You may not have noticed it, I certainly hadn't until I read about it today, but the pound has now fallen for seven straight weeks against the US dollar - its longest losing run since 2008. Whilst not exactly a "fall out of bed" it's lost nearly 3.5% of its value versus the dollar in that time, albeit from a starting point that was a 6-year high back at the beginning of July. We've also seen some modest weakness against the euro too during the past few weeks.
Elsewhere, Brussels issued 600 TMT of soft wheat export licences this past week, taking the marketing year-to-date total to 3.1 MMT. That's not too far behind last year's pace of 3.2 MMT as of this date. Cumulative barley exports are well down however at 1.4 MMT, a fall of 30% on a year ago. They've also granted 1.85 MMT worth of corn import licences to date in 2014/15.
A special preferential deal with Ukraine to allow 400 TMT of duty free corn imports into Europe this year has already been fully subscribed. They were also granted 101.5 TMT worth of wheat import licences this week, taking the total volume issued so far to 767.7 TMT out of a quota of 950 TMT that lasts until the end of October.
Oil World increased their forecast for the EU-28 rapeseed crop this year from a previous estimate of 23.1 MMT to a revised 23.5 MMT, a 10.85% increase on last year's harvest and a new record high volume.
FranceAgriMer said that the French wheat harvest was 97% complete as of Monday, and that the spring barley harvest was 96% done. There's not been much advancement on a week previously there. The rains that are slowing the early grain harvest look to be a positive boon for the corn crop though. The French analysts rated that at 86% good/very good, up a point on last week and fully 32 points ahead of this time last year.
Russia's Ag Ministry said that the country's 2014 grain harvest had now past the 70 MMT mark in bunker weight, and all that off little more than half (50.9%) of the anticipated area. Yields have so far averaged 2.96 MT/ha, an increase of nearly 18% on last year. Yields are however dropping off now that the harvest is getting going in Siberia, which is now 8% harvested and yields are only averaging 1.77 MT/ha, a 10% decline on a year ago.
The Ag Ministry say that the country will harvest "not less than 100 MMT" of grains this year versus 91.3 MMT in 2013. Wheat prices in Russia are said to have risen a little of late, partly as the initial harvest pressure has dissipated - those that had to sell have done so - and also due to weakness of the rouble due to the economic sanctions imposed against them by the West.
Russia's Ag Ministry said that the country will export 25-27 MMT of grains in 2014/15, versus a previous estimate of 25 MMT, and that the state will also buy 5 MMT on the domestic market to boost government stocks.
The day ended with Nov 14 London wheat up GBP0.15/tonne at GBP120.85/tonne, Nov 14 Paris wheat was EUR0.25/tonne firmer at EUR171.50/tonne, Nov 14 Paris corn was up EUR0.50/tonne EUR153.25/tonne and Nov 14 Paris rapeseed was EUR2.75/tonne higher at EUR323.50/tonne.
The HGCA said that UK wheat yields this year were "we'll above average" at 8.2-8.5 MT/ha, up around 11-15% from 7.4 MT/ha a year ago and also well above the USDA's current forecast of 7.8 MT/ha and the 10-year average of 7.7 MT/ha.
They said that this year's wheat harvest was now 55% done on a national level, with protein levels averaging around 12% in the milling wheats, where hagbergs are at 291.
They said that the winter barley harvest was finished, pegging yields at 7.2-7.4 MT/ha versus the 10-year average of 6.4 MT/ha. Spring barley harvesting was 40% complete, with yields here also demonstrating a significant improvement on the 10-year average of 5.4 MT/ha at 5.9-6.1 MT/ha.
The winter OSR harvest is complete with yields of 3.4-3.6 MT/ha a bit closer to the 'norm' of 3.3 MT/ha, they added.
Strategie Grains were said to have revised up their forecast for the proportion of this year's French wheat crop that is milling standard from 62% to 64%, although that's still a sharp fall compared to 88% last year.
Reuters reported that France had unloaded a small coaster of around 3,000 MT of UK milling wheat in Dunkirk this week, and was currently discharging a larger 27,500 MT consignment of Lithuanian milling wheat in Rouen. A second shipment of 4,400 MT of UK milling wheat is expected to arrive in the latter port today.
French and Ukraine origin feed wheat is still undercutting UK wheat on the international market however.
The HGCA website yesterday carried an interesting article that's worth a read, suggesting that there may be an opportunity to minimise losses for UK growers in selling the long Nov 15 future, to take advantage of the unusually large premium that it currently offers over the nearby Nov 14 contract.
Sweden said that they'd harvest 2.7 MMT of wheat this year, more than double the 1.3 MMT produced in 2013.
Belarus said that they'd harvested a record 9.2 MMT of grains this year, including around 3 MMT of wheat and 2 MMT of barley. Quality this year was said to be 'very high' by the Ag Ministry.
Romania said that it had harvested a record 1.1 MMT of rapeseed this year, up sharply from less than 650 TMT in 2013, due to increased plantings and better yields.
The Spanish Ag Ministry said that they'd imported 16% less wheat (3.37 MMT) in 2013/14, and around the same volume of corn (5.84 MMT).
Ukraine said it had exported 3.7 MMT of grains so far this season, including over 1.8 MMT of wheat and more than 1.4 MMT of barley.
Russian 12.5% milling wheat trades around $240/tonne FOB on the spot market, circa GBP144.50/tonne.
At the close of play Nov 14 London wheat was down GBP0.40/tonne to GBP120.70/tonne, Nov 14 Paris wheat ended EUR1.25/tonne lower at EUR171.25/tonne, Nov 14 Paris corn was down EUR1.00/tonne at EUR152.75/tonne, whilst Nov 14 Paris rapeseed was up EUR1.25/tonne at EUR320.75/tonne.
Confusion still reigns over the size and quality of the Ukraine grain crop. The PM now estimates this year's harvest at 55 MMT, down from last year's record 63 MMT. He threw a spanner in the works yesterday by saying that 15% of this year's grain crop would be lost due to the ongoing unrest.
His spokesman later said that what the PM meant was that 15% of the crops in the Donetsk and Lugansk regions would be lost. Last year's grain harvest in those two regions was 2.2 MMT and 1.3 MMT respectively. The Ministry of Agriculture today said that 2.1 MMT of grain had already been harvested in Donetsk, along with a further 904,600 MT in Lugansk.
The two totals combined would broadly agree with the PM's suggested 15% crop loss estimate, if we assume that pretty much nothing else gets harvested in these two areas. The bit that confuses me is that these aren't really big wheat areas, growing more corn, according to the USDA. The latter won't be ready to harvest yet anyway, fighting or no fighting, so how has Donetsk in particular already brought in a crop almost equal to that of last year?
If that isn't confusing enough, estimates as to how much of this year's Ukraine wheat crop is only of feed grade vary from 40% to as high as 70%. They've certainly been inactive on the international tender market of late, which suggests that they possibly don't really know the answer themselves yet. Reports now suggest that the Ukraine flour milling association has asked the government to temporarily halt exports of milling wheat until the quality of the crop can be better assessed.
Meanwhile Russia's harvest continues at a pace. Their Ag Ministry say that the country has produced 66.3 MMT off less than half of the planned area (46.4%). That includes 44.7 MMT of wheat off just over half (50.4%) of plan. Those figures suggest that a final grain harvest comfortably in excess of 100 MMT is on the cards, including well over 60 MMT of wheat.
Rusagrotrans today estimated Russia's August grain exports at 3.9-4.0 MMT, up from a previous forecast of 3.6 MMT and a record for any month ever, if achieved. July grain exports were also a record for that particular month, so they have certainly hit the ground running this season.
Belarus said that their grain harvest is almost over at 9.1 MMT, falling a little short of their Ag Ministry hopes for a record 10 MMT crop this year.
ADM Germany, formerly Toepfer International, estimated the 2014 wheat crop there at 26.04 MMT, up almost 6% on last year's production of 24.6 MMT. They forecast the German 2014 rapeseed crop at 6.08 MMT, a 5.5% rise on last year.
French growers are in the unusual position of having a large volume of feed wheat to sell this year. I hear in the market today that FOB offers for French feed wheat are comfortably undercutting the UK market at the equivalent of around GBP113/tonne FOB for Aug/Sep shipment. Ukraine new crop corn meanwhile is quoted at around GBP110/tonne FOB equivalent for Nov shipment.
The pound took a bit of a hit after it was revealed that UK inflation fell to 1.6% in July, down from 1.9% in June. That seemingly puts the Bank of England under little pressure to raise interest rates just yet. That may have helped buoy London wheat a little today.
The day ended with Nov 14 London wheat down GBP0.20/tonne at GBP121.10/tonne, Nov 14 Paris wheat was up EUR0.75/tonne at EUR172.50/tonne, Nov 14 Paris corn was up EUR0.75/tonne at EUR153.75/tonne and Nov 14 Paris rapeseed fell EUR2.00/tonne to EUR319.50/tonne.
London wheat in particular is still swimming against a potential tidal wave of new crop feed wheat coming its way in 2014/15.
As already discussed on here, Strategie Grains' latest estimates indicate that there will be around 20 MMT more feed wheat in Europe this year than there was last season.
Today, a Ukraine analyst with Agrotrade estimated that as much as 70% of their wheat crop might also be confined to the feed bin this year.
Persistent rain in the run-up to harvest-time, the same plight suffered by the French wheat crop, is the reason they gave. That compares with a Ag Ministry forecast of "only" 40% of this season's crop being feed grade versus 25% a year ago.
If the higher Agrotrade estimate is correct then Ukraine will have around 15.4 MMT of feed wheat on it's hands this year, up almost threefold from 5.6 MMT a year ago.
This isn't good news for feed wheat prices, not with a large (and near record) EU-28 corn crop also on the way. Ukraine too are expecting to harvest a corn crop that will only be beaten in size by last year's bumper production. If EU producers can afford (and have the room) to store their 2014 corn crop that's a luxury that will not be available to many of the producers in Ukraine. Their crop will most likely simply flood onto the market as soon as it's harvested.
EU growers don't much care for current wheat, barley or rapeseed prices - let alone those for new crop corn - but it's perhaps unlikely that many here will be able to simply store their entire inventory for both financial reasons as well as those regarding physical space. Storage also costs money too of course.
So here we are, caught between a rock and a hard place, with cash prices at, or very close to, 4-year lows on all four of those commodities.
The French wheat harvest should be just about over by now, so a more accurate assessment of the final quality there shouldn't be too far away. "Highly variable" is probably the best way to describe their crop this year.
Meanwhile the German wheat harvest is said to be around 75% complete. What's been cut so far is said to be "fairly decent" according to a report on Reuters today. It's the final 25% that is now causing concern, it too has been dogged by late season rains. Hagbergs so far are said to be "OK" and protein levels are maybe down half a percentage point on the recent average.
The German farmers' association DBV raised their forecast for the 2014 grain crop there to 50 MMT versus 47.7 MMT a year ago. That includes 26.2 MMT of wheat versus a previous forecast of 25 MMT and up 6.5% compared to 24.6 MMT a year ago. Rain it seems does indeed make grain. It's quality, not quantity, that the market is worried about.
Paris wheat for Nov 14 currently trades at the equivalent of around a EUR21.50/tonne premium to London wheat, up from EUR16/tonne a month ago. We could see that gap widen further yet.
The day ended with Nov 14 London wheat down GBP1.80/tonne at GBP121.30/tonne (a new 4-year closing low for a front month), Nov 14 Paris wheat was EUR2.00/tonne lower at EUR171.75/tonne, Nov 14 Paris corn was down EUR1.50/tonne EUR153.00/tonne and Nov 14 Paris rapeseed was down EUR0.25/tonne to EUR321.50/tonne.
For feed wheat in particular, bad news is stacking up. Strategie Grains last week suggested that the EU-28 feed wheat crop will be 20 MMT larger than it was last year, an increase of around 50% on last year. Some 3 MMT of that extra volume may end up coming from the UK. FCStone today estimated the UK wheat crop at 16.6 MMT (maybe even higher), the largest ticket in the hat so far, and 300 TMT higher than Strategie Grains said last week.
Anecdotal reports from the country continue to suggest bumper UK yields this year, in wheat, barley and oats. A final UK wheat crop, second only to 2008's 17.2 MMT, looks like it could be on the cards.
If we use the HGCA's estimate that 58% of this year's UK wheat crop is of group 4 varieties, essentially feed wheat, then FCStones' figure puts the UK feed wheat crop at 9.63 MMT this year, which would be 45% more than in 2013.
Elsewhere, in Ukraine the early grain harvest is almost done at 98% complete at 34.72 MMT, according to the Ag Ministry. They say that just over 24 MMT of that total is wheat (in bunker weight). If we use the current USDA estimates of a clean weight total of 22 MMT this year and 22.3 MMT a year ago, along with the Ag Ministry suggestion that 40% of this year's crop is only of feed grade (versus 25% a year ago), then the Ukraine feed wheat crop this year will be 58% higher than a year ago at 8.8 MMT.
Throw into the equation that the EU-28 corn crop is looking good and in for a production increase this year, whilst competition from cheap Ukraine new crop corn remains abundant, and the outlook for feed grain doesn't look overly rosy across the next few months.
Whilst UK growers may be in the position to hold onto their grain and not sell, hoping for better prices ahead, that isn't necessarily the case in Ukraine and Russia. APK Inform today reported that Ukraine grain exports via seaports increased by 41% last week to 595.8 MMT. That total included 427.6 TMT of wheat and 162.2 TMT of barley.
FranceAgriMer reported on Friday that 85% of the French corn crop was in good to very good condition, up a point on a week ago and vastly superior to only 54% this time last year. The crop is also forward, with 100% of it now at or past the silking stage versus only 84% in 2013. They said that the French wheat harvest was 95% complete as of last Monday versus 82% a year ago.
FCStone also put the Polish 2014 wheat crop at 10.6 MMT, up 300 TMT versus Strategie Grains' recent estimate, and who put production in 2013 at 9.5 MMT. FCStone's EU-28 soft wheat estimate was 142.7 MMT, and their all wheat forecast was 149.9 MMT, a 3.1 MMT increase on previously.
Russia said that it had now harvested 65.1 MMT of grain off only 44.9% of the planned area, with yields up 21.5% at 3.11 MT/ha.
That total includes 51.2 MMT of wheat off 49.7% of plan, with yields averaging 3.53 MT/ha, a 20.5% rise versus 2013. That makes trade talk of a 60 MMT+ crop look very easily achievable, if we believe what the local Ag Ministry say of course.
There's also talk of quality issues with Russian wheat this year, suggesting that they may have a larger proportion of feed grade to shift in 2014/15.
Jordan tendered for 100 TMT of optional origin hard wheat and a similar volume of feed barley, both for Jan/Feb shipment.