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.
At the close of play Nov 14 London wheat was up GBP1.30/tonne to GBP123.10/tonne, Nov 14 Paris wheat ended EUR3.00/tonne higher at EUR173.75/tonne, Nov 14 Paris corn was up EUR1.00/tonne at EUR154.50/tonne, whilst Nov 14 Paris rapeseed was down EUR0.75/tonne at EUR321.75/tonne.
For the week that still puts London wheat GBP0.70/tonne lower however, with Paris wheat down EUR0.50/tonne, corn unchanged and rapeseed falling EUR6.25/tonne.
London and Paris wheat are so far just about managing to hold above support at GBP120/tonne and EUR170/tonne respectively, although both have had the odd little wobble below those levels in recent days.
The developing situation in Ukraine continues to turn this way and that. The implications for the grain market remain unclear. The nearby market remains depressed, the Black Sea region is where the cheap offers are, although there's always the possibility that buyers will shy away from committing to purchases that they may not ultimately get if the situation in the region escalates further. There's always the possibility of an "anti-Russian" stance from some international buyers, although money talks at the end of the day.
The currencies of both countries are weak on the back of the crisis. Credit is tight and farmers need to sell to pay their bills and fund their planting programmes for 2015. Interest rates in the region are also rising.
The combination of all of those factors means that there are plenty of local forced sellers, despite low world prices. At least the weak hryvna and rouble mean that farmers are getting a bit more in their local currency for their crops, although that factor will also be increasing the cost of imported inputs.
There could be more pressure to come if farmers are pushed into a similar situation with corn once they start harvesting that, although there's also some talk that the warm and dry weather that has sped the early grain harvest in the region may now be starting to hurt potential corn yields.
Russia said that they'd harvested 12.4 million hectares of wheat so far (versus 11.8 million this time last year), producing a crop of 44 MMT to date (versus 35.1 MMT in 2013) off just under 49% of the planned area. Yields are said to be up 19% at 3.55 MT/ha. Protein levels are said to be a bit lower than last year, although they are expected to improve as the harvest progresses north, even if yields here will drop. Talk of a 60 MMT or more Russian wheat crop this year is now widespread.
The Ukraine early grain harvest, which excludes corn, meanwhile is just about done. That's produced a wheat crop of 23.8 MMT along with 9.2 MMT of barley (both volumes in bunker weight), according to the Ag Ministry.
Russian 12.5% milling wheat was said to have traded at USD217/tonne FOB the Azov Sea for prompt shipment. That's the equivalent of around only GBP130/tonne. Ukraine new crop corn is said to be offered around USD183/tonne FOB the Black Sea, around GBP109.50/tonne.
In other news, Strategie Grains estimated yesterday that the EU-28 would produce 144.1 MMT of soft wheat this year, a 6% increase versus 2013. They said that only 59% of the crop would make milling standard, down from 71% a year ago.
The bare facts of that information, if correct, mean that EU-28 feed wheat supplies in 2014/15 will rise fully 50% compared with last year to 59.1 MMT. Milling wheat availability will drop nearly 12% to 85 MMT meanwhile.
That doesn't sound too friendly to feed wheat especially with a large EU-28 corn crop coming, regardless of whether Ukraine/Russian corn production estimates take a hit, once the harvest of the latter gets going.
Defra estimated the English wheat area for this year's harvest to be up 19% at 1.8 million hectares. They pegged the winter barley area at 366k ha, up 42% and the largest since 2003. Spring barley plantings were seen down 40% at 343k ha.
The HGCA said that the UK harvest was 45% done as of Aug 12, as the remnants of Hurricane Bertha slowed progress. Only around 320k ha was cut for the week through to that date, half the area harvested the week prior, they estimated.
"Yields continue to be above average for most crops, although where crops were waterlogged over the winter, established poorly or there were high weed and disease levels, yields have been reduced," they said.
The 2014 winter wheat harvest is now around 30% done nationally. In their first forecast of the season so far they estimated yields at 8.0-8.2 MT/ha, up around 5% versus the 10-year average and 9.5% above last year's 7.4 MT/ha. Bushel weights are averaging 77 kg/hl, with hagbergs and proteins in the milling wheats at 295 and 12% respectively, they added.
The UK winter barley harvest is almost over at 95% complete. Yields are much better than the 10-year average of 6.4 MT/ha at 7.2-7.4 MT/ha, a rise of 14%. Around 20% of the nation's spring barley crop had been cut as of Aug 12, with yields expected to average 5.9-6.1 MT/ha, up 11% on the 10-year average.
Virtually all (97%) of the UK's 2014 winter OSR harvest was now complete, with yields averaging 3.4-3.6 MT/ha, up around 6% versus the 10-year average of 3.3 MT/ha, they concluded.
The old adages "big crops get bigger" and "rain makes grain" are being well used at the moment, and with good reason. The USDA are now forecasting record world wheat, corn and soybean production in 2014/15.
The Russian grain crop isn't just ticking up either, if Tuesday's 6 MMT hike in wheat production and 2 MMT rise in barley output are anything to go by.
The USDA now have this year's Russian wheat crop at 59 MMT, and are forecasting that the country will also produce 18.5 MMT of barley in 2014. The question now regarding Russia is "is that it, or are there more rises to come?"
If we accept the bare numbers coming through from the Russian Ministry then it looks like these figures could still be too low. They say that the country's 2014 grain harvest now stands at 61.1 MMT off little more than 40% of the planned area, with yields currently averaging 3.19 MT/ha, which is 20% more than this time a year ago.
Whilst the harvest is well advanced in the south and central areas, it is only just getting going in Siberia and the Urals. These are less productive regions, and will bring the national average yield figure down as the harvest progresses, but these areas should still be able to produce a 2 MT/ha average.
Wheat accounts for 43.6 MMT of this year's Russian grain harvest so far, off 12.2 million hectares, according to Ministry estimates. The USDA estimate the Russian wheat harvested area at 23.75 million hectares this year. That leaves 11.55 million hectares still to harvest. If that area only produces a yield of 2 MT/ha then we'd potentially be looking at a Russian wheat crop of 66.7 MMT in bunker weight this year.
That could be one of the reasons why Russian grain exports hit 3.12 MMT in July, a record for that particular month, and are seen rising to around 3.6 MMT in August.
Switching back to Europe, French analysts Strategie Grains today hiked their forecast for the EU-28 soft wheat crop by 3.7 MMT from just a month ago due to better than anticipated yields which they described as being "exceptional in many countries".
That takes production up to 144.1 MMT, a 6% rise on a year ago. With an anticipated durum wheat crop of a further 7.2 MMT to add to that, EU-28 all wheat production will now come in at 151.3 MMT this year if Strategie Grains are correct, which would beat the 2008 record year by around 200 TMT (although European data now includes Croatia). This is also significantly higher than the USDA's forecast of 147.9 MMT from just a few days ago.
They did however caution on quality, cutting the percentage of the wheat crop rated as being suitable for milling down from the 67% forecast last month to 59%, and a sharp reduction on 71% this time last year. These problems are particularly manifest in France, for whom they cut projected wheat exports in 2014/15 by almost 3 MMT.
The French Analysts also increased the size of the EU-28 barley crop by 1.4 MMT from last month to 57.7 MMT (versus 56.2 MMT from the USDA) and upped their corn estimate by 1.6 MMT to 68 MMT (versus 67 MMT from the USDA).
Meanwhile Germany's farm co-operatives association DRV raised their estimate for the 2014 grain crop there to 50.1 MMT, versus 47.8 MMT last year and 45.6 MMT for the 5-year average. They also see OSR production rising this year from 5.8 MMT to 6.1 MMT.
They estimated the German 2014 winter wheat crop at 26 MMT, up 5.4% on last year, with winter barley production rising 10% to 9.2 MMT, and corn output up 13.7% to nearly 5 MMT due to significantly higher yield potential. They said that the quality of this year's wheat crop was "average to good" although proteins are lower than last year.
Elsewhere, the Czech Stats Office raised their estimate for the 2014 cereal crop there from 6.65 MMT to 7.06 MMT, up 3.5% on last year's 6.82 MMT and 4.4% above the 10-year average. Wheat will account for 4.74 MMT of that total, they said.
The day ended with Nov 14 London wheat up GBP0.20/tonne at GBP122.25/tonne, Nov 14 Paris wheat was EUR0.75/tonne lower at EUR171.25/tonne, Nov 14 Paris corn was unchanged EUR154.00/tonne and Nov 14 Paris rapeseed was down EUR0.50/tonne to EUR321.75/tonne.
In amongst the detail of last night's USDA report was an increase in the size of the the UK wheat crop, up from the 15.3 MMT forecast last month to 15.4 MMT, a 29.2% rise year-on-year. They forecast the UK barley crop at 5.9 MMT, unchanged from last month and 16.8% down versus 2013. They tweaked higher their estimate for the UK OSR crop, up from 2.53 MMT to 2.57 MMT, a 20.8% rise compared with last year.
Whilst the forecast for the EU wheat crop was essentially unchanged at just under 148 MMT, exports were cut by 3 MMT due to the various quality issues being experienced around Europe.
The EU barley crop was increased from the 55.9 MMT forecast in July to 56.2 MMT, and the OSR crop was also estimated a little higher at 22.65 MMT versus 22.4 MMT previously.
Significant improvement in production potential in Russia and Ukraine was noted. Russia's wheat crop was increased a hefty 6 MMT to 59 MMT, enabling them to potentially export 22 MMT of wheat in 2014/15, a 4 MMT or 22% increase versus last season. Russia's 2014 barley production estimate was also raised by 2 MMT to 18.5 MMT, a 20% increase on a year ago. Their barley exports in 2014/15 were increased by 300 TMT to 3.8 MMT, a sharp 40.7% rise versus last year.
Ukraine's wheat crop was increased by a more modest 1 MMT from last month to 22 MMT, only a small drop on 22.3 MMT last year. Barley output was increased from 7.8 MMT to 8.2 MMT, an 8.5% increase year-on-year.
The EU corn crop was also forecast higher, seen benefiting from the recent rains that have disrupted the wheat harvest, at just over 67 MMT that represents an increase of almost 5% versus 12 months ago.
Russia said that it had now harvested 60.2 MMT of grains off just over 40% of the planned area, including 43.4 MMT of wheat off 47.9% of plan. Wheat yields are said to be averaging 3.58 MT/ha versus 3.02 MT/ha a year ago.
The USDA said last night that Russian wheat yields were "outstanding" - forecasting them to average 2.48 MT/ha, an 18% increase versus the 5-year average. You will notice that this figure is still well below the 3.58 MT/ha that the Russian Ministry themselves say is the average so far.
Rusagrotrans said that Russia had exported 3.12 MMT of grains in July, a record for the first month of a marketing campaign, and 24% up on July 2013.
UkrAgroConsult raised their forecast for the 2014 Ukraine grain crop from 57.4 MMT to 58.5 MMT in clean weight. They also increased Ukraine's 2014/15 grain export potential by 2.5% from last month to 32.5 MMT. Ukraine's grain exports so far this season (Jul 1 - Aug 11) were 3.03 MMT, a 48% increase on the same period in 2013/14.
The desire to turn grain into dollars remains strong in Russia, and particularly Ukraine where the local currency - the hryvna - has lost a further 13% of it's value against the US dollar in the past fortnight and is down more than 37% since the turn of the year.
Competition from both Ukraine and Russia looks like continuing to be pretty fierce for a while yet. Ukraine new crop corn prices are said to be down to around $183-184/tonne, less than GBP110/tonne FOB the Black Sea.
At the close of play Nov 14 London wheat was down GBP1.15/tonne at GBP122.05/tonne, Nov 14 Paris wheat ended EUR0.25/tonne lower at EUR172.00/tonne, Nov 14 Paris corn fell EUR0.50/tonne at EUR154.00/tonne, whilst Nov 14 Paris rapeseed was down EUR2.50/tonne at EUR322.25/tonne.
Rain makes grain is the old adage, even if it sometimes only makes for lots of low quality grain (just as it did here in 2008 when the harvest dragged on into October and we produced our highest wheat crop ever). The French Farm Ministry today increased their forecast for the 2014 domestic soft wheat crop from 36.5 MMT to 37.3 MMT, a 1.2% rise on last year.
The Ministry also raised their outlook for this year's French barley crop from 11.3 MMT to 11.65 MMT, up 12.9% versus 2013, and increased their French OSR production estimate from 5.2 MMT to 5.5 MMT, a 26.6% hike on a year ago. In addition they forecast the French 2014 corn crop (their first estimate of the year) at 15.1 MMT, a 2.5% rise versus 2013 despite a fall in plantings, with yields up 8.1% to 9.07 MT/ha this year.
Separately, FranceAgriMer largely concurred, estimating the 2014 French soft wheat crop at "above 37 MMT" versus an original forecast of 36.7 MMT a month ago. They estimated yields at 7.5 MT/ha, up 0.1 MT/ha on last year and 0.2 MT/ha above the 5-year average. They see barley production at 11.4 MMT this year, and agree with the Ministry's forecast of 5.5 MMT for the 2014 French OSR crop.
Elsewhere the Romanian Ag Ministry raised their forecast for the 2014 corn crop there by 6.7% to 9.8 MMT. The Hungarian Ministry estimated corn production there at 8 MMT versus 6.73 MMT a year ago.
Bulgaria said that it's rain delayed 2014 wheat harvest stood at 4.5 MMT off 89% of the planned area, and that despite the rain the barley harvest was almost over at 98.5% complete, producing a crop of just under 800 TMT to date.
Customs data shows that the UK imported 225 TMT of wheat in June, a 9-month high, taking the 2013/14 seasonal total to 2.21 MMT.That's still historically high even if it is down versus the 2.96 MMT imported in the previous marketing year. Corn imports in June were 118 TMT, taking the 2013/14 total to 2.39 MMT, a 41.4% increase on the prior 12 months.
Late in the day the USDA raised their forecast for the world 2014/15 wheat crop by almost 11 MMT to a record 716 MMT, taking ending stocks up from the 189.54 MMT estimated in July to almost 193 MMT.
Production in Russia was hiked from 53 MMT to 59 MMT and Ukraine was raised from 21 MMT to 22 MMT. "The Russia and Ukraine increases are based on harvest reports that indicate very high winter wheat yields, especially for Russia," they said.
In Europe they saw wheat production essentially unchanged, but increased feed usage from 54.4 MMT to 57 MMT as "excessive harvest-time precipitation in several European production regions has increased the quantity of feed-quality wheat." They increased the outlook for this year's EU-28 corn harvest from 65.64 to 67.05 MMT.
The day ended with new crop Nov 14 London wheat closing GBP0.60/tonne lower at GBP123.20/tonne, Nov 14 Paris wheat was EUR2.00/tonne easier at EUR172.25/tonne, Nov 14 Paris corn was unchanged at EUR154.50/tonne and Nov 14 Paris rapeseed fell EUR3.25/tonne EUR324.75/tonne.
The market was perhaps relieved that tensions between Russia and the West didn't deteriorate further over the weekend.
The USDA could add a little bit more bearish news to the pot tomorrow, with an increase in US corn production and yields to record levels seeming highly likely. There could also be a tweak higher to EU wheat output, and maybe one for corn as well. Russian wheat production should certainly be in for an increase, as last month's 53 MMT estimate is now around 5 MMT below where some local analysts are lining up.
The last figures out from the Russian Ministry said that the 2014 grain harvest there had now been completed on 16.9 million hectares, which is 36.2% of plan, producing a crop of 55.8 MMT so far. Yields were reported to be averaging 3.3 MT/ha, up almost 20% on a year ago.
Wheat accounts for 41.4 MMT of that total off 45.4% of the intended area, with yields said to be up 18.8% at 3.6 MT/ha. As you can see from that, a final harvest of only 53 MMT looks way to low even if the Russian figures are in bunker weight (uncleaned) and allowing for lower yields from spring wheat in less productive areas like Siberia.
Ukraine's Ministry said that they'd already exported 2.7 MMT of grain so far in 2014/15 (the season began on Jul 1), including 1.2 MMT of barley, 1.1 MMT of wheat and 361 TMT of corn.
Kazakhstan said that they expected to export 8-9 MMT of grain in 2014/15, a similar volume to last season, out of an anticipated harvest of 17 MMT.
Egypt said that it will maintain the price it pays the country's farmers for wheat through to the 2015 harvest, despite the fact that these levels are now over $100/tonne above world prices, in an effort to boost national production. It may also boost smuggling as $100/tonne is a big carrot to dangle.
Agritel said that they estimated French wheat yields at 7.57 MT/ha this year, a 2.3% rise on 12 months ago, although recent rains mean that quality is highly variable. They estimate production at very close to the record levels of 1998.
They said that French milling wheat prices delivered to Rouen (on the basis of 76 kg/hl, 220 hagberg and 11% protein) were around EUR177/tonne (circa GBP141.50/tonne), with French new crop rapeseed FOB Moselle offered at around EUR326/tonne (circa GBP260/tonne).
The HGCA reported last week that the 2014 UK harvest was one of the earliest in recent years. There might not be a great deal of further progress this week as Bertha brings cool and wet conditions for much of the country (and parts of the rest Europe too). Things look drier, brighter and warmer though around 10 days from now.
The day ended with Nov 14 London wheat down GBP1.20/tonne at GBP123.80/tonne, Nov 14 Paris wheat was EUR2.00/tonne lower at EUR172.25/tonne, Nov 14 Paris corn fell EUR2.00/tonne to EUR158.50/tonne and Nov 14 Paris rapeseed rose EUR1.00/tonne to EUR328.00/tonne.
For the week that puts London wheat up GBP1.80/tonne, with Paris wheat gaining EUR0.50/tonne, corn down EUR5.00/tonne and rapeseed unchanged.
Yesterday's news that deliveries would be accepted against the Paris wheat contract on wheat with hagbergs as low as 170, albeit at an allowance, and protein levels of 10.5% doesn't set the bar too high for a "milling wheat" contact. There certainly won't be a queue of international buyers wanting to buy what could end up be a very full Rouen futures store system come November.
The HGCA said that around 40% of the UK combinable crop area had been cut as of Aug 5, one of the best starts in recent years. The wheat harvest was already nearly 20% done as of Tuesday versus only around 5% normally at this time.
It's still too early to give a forecast on yields, they said. However hagberg levels on what has been cut are good, typically around the 300 mark. Specific weights are also good at around 77kg/hl, and protein levels in milling wheats are around averaging 12%, they added.
Almost all the UK winter barley and rapeseed was now cut. They said that average yields in that were 7.2-7.4 MT/ha versus a 10-year average of 6.4 MT/ha. Rapeseed yields are coming in at an average 3.4-3.6 MT/ha compared to the 10-year norm of 3.3 MT/ha. "Malting barley is mostly achieving specification, with only occasional crops with high screenings or very low grain nitrogen," they added.
UK growers will be keen to get as much of their harvest in as possible before the well advertised remnants of Hurricane Bertha arrive on these shores on Sunday. There still seems to be a fairly large degree of uncertainty/disagreement over exactly how far north (or south) it will hit.
Oil World yesterday increased their forecast for the EU-28 rapeseed crop to a record 23.1 MMT. That included upgrades from their previous estimates for Germany (to 6.2 MMT versus 5.9 MMT last month and 5.8 MMT last year), France (5.3 MMT versus 5.2 MMT and 4.4 MMT respectively) and Poland (2.9 MMT versus 2.8 MMT last month and last year). The UK crop was pegged at 2.5 MMT, unchanged from July but 19% up on last season.
That's the largest EU-28 production estimate in the ring so far, from a company not normally noted for having flights of fancy. Strategie Grains said 22.9 MMT and Informa 22.4 MMT earlier in the week.
Ukraine said that they'd exported 2.534 MMT of grain so far this month (to Aug 6), including 1.1 MMT of barley and a very similar amount of wheat. Corn exports so far this season stand at just under 300 TMT, but these will soon start to pick up once the 2014/15 harvest gets underway.
Russia said that they'd now harvested 55.8 MMT of grains off 36.2% of the planned area. That includes 41.4 MMT of wheat (off 45.4% of plan), with yields averaging 3.6 MT/ha, an 18.8% increase on this time last year.
Belarus said that they'd harvested 8.165 MMT of grains off 84.7% of the planned area. They still hope to achieve a record 10 MMT grain crop this year.
France said that they'd exported 12.2 MMT of soft wheat to non-EU destinations in 2013/14, a 23% rise versus a year previously. Top home was Algeria taking 5.7 MMT, a 44% increase compared to 2012/13. They probably won't feature so prominently in 2014/15, given France's well touted quality problems. French soft wheat exports within the EU in 2013/14 were down 5% at 6.8 MMT.
FranceAgriMer said that the French wheat harvest was 92% done as of Monday, up from 76% a week previously and versus only 61% a year ago. The winter barley harvest is finished. The spring barley harvest stood at 87% complete versus 67% a week ago and only 49% done this time last year. The corn crop is 97% silking versus 88% last week and 70% a year ago. Corn crop conditions are impressive at 84% good/very good, unchanged on a week ago and up from only 53% this time last year.
Meanwhile the 3-day truce in Gaza is over, and things have sadly but predictably resumed where they left off. Obama has OK'd air strikes against Islamist militants in northern Iraq and who knows what might happen in eastern Ukraine next? The world could be a different place by Monday.
The FTSE 100 and DJIA closed at near 4-month lows last night on the back of heightened investor nerves over such turmoil. Will that mean a flock back to commodities, or will their risk aversion appetite also include the grain sector? Only time will tell.
The day finished with Nov 14 London wheat down GBP1.00/tonne at GBP125.00tonne, Nov 14 Paris wheat ended EUR2.00/tonne lower at EUR176.25/tonne, Nov 14 Paris corn was p EUR1.25/tonne at EUR156.50/tonne, whilst Nov 14 Paris rapeseed was up EUR1.25/tonne at EUR327.00/tonne.
It was announced that both delivery points against the Paris milling wheat contract had agreed on the minimum specification that they would accept against the 2014 crop. Minimum protein levels of 10.5% look easily achievable, although a minimum hagberg level of 220 does not. There was however a "rider" attached that hagbergs down to 170 would be allowed, albeit at an allowance,
Russian Premier Putin is expected to make an "urgent announcement" to the nation at 20.30 Moscow time. The trade is anxious as to what that might entail.
Traders are already debating what the implications are for the grain trade of the Russian decision to ban the import of various meat and agricultural products from Europe, the US and others. It may certainly mean that less Russian wheat is available on the export market, as more could need to be fed locally.
It could also mean a reduction in demand for feed in some countries. Russia is the second largest global buyer of US chicken for example. It could also mean that at least some of that demand is simply switched elsewhere eg. Brazil.
Meanwhile, Rusagrotrans raised their forecast for the Russian 2014 grain crop from 98.2-99.9 MMT to 100.9-103.3 MMT. Production in 2013 was 92.4 MMT according to the Ag Ministry.
The Russian Ag Ministry said that the country had harvested 55.8 MMT of grains to date, off only 36.2% of the planned area. Yields were said to be up almost 20% at 3.3 MT/ha.
That total includes 41.4 MMT of wheat off 45.4% of the anticipated area, along with 8.7 MMT of barley off 31.6% of plan. If these figures are accurate then the 2014 Russian harvest could ultimately prove to be much higher than current estimates even if yields decline as the harvest progresses into less productive areas and lower yielding spring wheat.
Ukraine said that they'd exported 2.534 MMT of grains so far this season, including over 1.14 MMT of barley and in excess of 1 MMT of wheat.
APK Inform said that 63% of this year's Ukraine wheat harvest was of milling standard, down from 70% a year ago.
They added that this year's wheat harvest had suffered badly from high levels of fusarium due to a lack of adequate spraying because of a general lack of credit, heightened by the wet growing season.
Tunisia said that their 2014 grain harvest was already past the 1 MMT mark (to Jul 31), and that they expected a 2014 crop of around 3.2 MMT this year, up almost 150% on last year's drought hit crop of only 1.3 MMT.
Oil World forecast the EU-28 2014 rapeseed crop at a new record 23.1 MMT, up 1.9 MMT on last year and higher even than Strategie Grains' recent estimate of 22.9 MMT.
As the EU-28 wheat harvest picks up, so too are exports. Brussels granted 532 TMT worth of soft wheat export licences this past week, the busiest week so far, taking the season to date total to 1.8 MMT. They also issued 131 TMT worth of barley export licences, taking the 2014/15 total so far to 1 MMT.
Corn imports continue to more or less match the pace of wheat exports, with 490 TMT of corn import licences granted this week. The season to date total is now 1.6 MMT.
The EU also issued 48,950 MT of duty free wheat import licences to Ukraine under the existing preferential deal that permits 950 TMT of Ukraine wheat to enter the bloc tariff free. The exemption period runs to Oct 31. To date 426 TMT worth of licences have been issued.