Brussels issued export certificates for 599 000 MT of wheat during last week.
Barely licences were a pleasing 174 000 MT.
Russia's Ag Min said that they'd exported 22 MMT of wheat so far this season
(out of a 62 MMT harvest), and increased it's forecast for full season exports
estimate to a record 24-25 MMT.
Saudi Arabia has announced a tended or 550,000 MT of 12.5% hard wheat for Jul/Aug
delivery with the results expected over the weekend.
Activity is light ahead of Monday's Bank Holiday, with some trader's already
away from their desks.
May 16 rapeseed goes off the board on Friday, so could display some choppy
trade ahead of that. Despite expiry being only a few days away, open interest
in May 16 is still the largest of all the Paris rapeseed contracts.
Early spring grin plantings in Ukraine are just about done at 99% complete,
according to the AG Ministry there. Spring barley sowing is complete on 98%
of the government forecast at 1.78 million ha.
Oilseeds and corn are excluded from early spring grain figures. In Ukraine
corn plantings are estimated 49% complete so far 92.24 million ha), with sunseed
55% planted (2.859 million ha) and soybeans 25% (502 million ha) sown.
In March Ukraine exported 2.427 MMT of corn, which is 32% greater than the
volume of exports in March 2015 (1.836 MMT), according to UkrAgroConsult.
Ukraine exported a record 2.7 MMT of grains in April, And said that they'd
exported 33.3 MMT of grains so far this season, including 15 MMT of corn, 15
MMT of wheat and 4.1 MMT of barley. The barley campaign is just about over for
Concerns still linger over Ukraine's production prospects for this year though.
"Dry conditions during the sowing period and frost kill in January, drastically
impacted winter crops in both Ukraine (and Poland). Despite favourable conditions
since the beginning of March it looks like winter crops have had very little
regrowth," the HGCA reported MARS as saying yesterday.
That doesn't seem to be the case in Russia though, where ProZerno estimate
2016 grain production 0.6% higher than last year at 105.46 MMT. Wheat could
account for almost 61 MMT of that, they say.
Morocco announced that it will maintain its import taxes on wheat of up to
30% until the end of the year. The move comes despite a poor harvest leading
to an anticipate jump in import needs in 2016/17.
According MARS, the European crop monitoring service, winter crop conditions
in Europe are improving. They rated winter wheat yield potential in 2016 at
6.11 MT/ha versus 5.96 MT/ha seen last month. For winter barley, yields have
been upgraded to 5.97 MT/ha vs 5.82 MT/ha and for rapeseed to 3.35 MT/ha vs
Potential corn yields were lowered from 7.12 MT/ha to 7.06 MT/ha however.
"Crop growth conditions have been good in most regions of Europe,"
"In most regions, weather conditions have been favourable for winter crop
growth and spring sowings," Mars said.
"In general, the current prospects for EU-28 yields are above the five-year
average, and the forecast for total cereals has increased compared to our last
bulletin, reflecting the generally good growth conditions".
France is said to be "benefiting from good conditions," with above-trend
yields expected. Note that French growers have planted an 80-year high winter
wheat area, and current crop conditions are ahead of a year ago when a record
crop was brought in.
The latter goes off the board on Friday when new crop Aug 16 will become the
new front month.
The USDA's office in Moscow said that Russia may harvest 101 MMT of grains
this year, including 58 MMT of wheat, 18 MMT of barkey and 12.5 MMT of corn.
All would be a little below the levels produced in 2015. Exports might fall
1.4 MMT to 30.2 MMT in 2016/17, it is predicted, but still at historically high
They peg wheat exports at 22 MMT (-1 MMT%), with those for barley at 4.0 MMT
(-0.2 MMT) and corn at 3.5 MMT (-0.3 MMT).
Russian seaports only exported 250 TMT of grains last week, down sharply from
456 TMT the previous week. Wheat shipments totalled 176 TMT, corn exports 46
TMT and those for barley were 25 TMT.
Ukraine's exports via seaports also dropped, down from 662 TMT to 414 TMT,
including 243 TMT of wheat, 160 TMT of corn and 117 TMT of barley.
Brussels confirmed 712 000 MT of soft wheat and 137 000 MT of barley export
licences this past week. Wheat exports thus were up 34% on a week ago.
Wheat crops across most of Europe are developing well, and another bumper production
year is expected, if not quit matching last year's dizzy heights.
"Poland is the main problem area but otherwise the picture is broadly
looking good," a German analyst told Reuters.
The French have planted an 80-year high record crop, and conditions there were
rated almost universally good to very good as of last Monday (92%) say FranceAgriMer.
A Bloomberg survey this week put the French soft wheat crop at an average of
39.4 MMT this year, down 3.9% on a year ago.
With such a high proportion of the crop rated good to very good though it may
be that yields outperform and production is closer to, or even exceeds, last
year. The highest estimate in the survey was 41.9 MMT.
A similar survey at this point last year only pegged average production at
around 188.8.131.52 MMT as I recall, based on good to excellent ratings around
the 91% mark.
Germany's 2016 winter wheat crop will probably fall around 1.7 percent from
last year's bumper harvest to 26.10 MMT. That's still above the recent 5-year
average of about 25 million, Germany's farm cooperatives association estimates.
The Polish winter wheat crop could be 4% down last year, say Sparks Polska.
"Most of the lost winter wheat acreage will be replanted with spring wheat.
Recent warm and rainy weather was more crop-friendly," they told Reuters.
At the finish, front month May 16 London wheat was up GBP1.70/tonne at GBP107.40/tonne,
May 16 Paris wheat was EUR4.75/tonne higher at EUR155.75/tonne, Jun 16 corn
was up EUR4.75/tonne to EUR163.75/tonne and May 16 rapeseed jumped EUR3.00/tonne
This was the highest close on a front month in London wheat since late January,
the best of the calendar year so far on corn and the highest since early December
Russian shipping data shows that their wheat exports fell last month to 1.78
MMT, down 215% versus the shorter month previously. Egypt was the largest home
taking 28% of all exports, with Turkey (11%) in second and Iran (8.7%) in third.
Russia's corn exports remain relatively strong by comparison, down only 2.8%
versus February, and up 53% year-on-year, at 669,400 TMT. Turkey was the top
buyer last month with 21.6% followed by the Netherlands with 20.7% then South
Korea with 19.4%.
UkrAgroConsult expects 2016/17 Ukraine wheat production to reach 19.8 MMT,
up from its previous estimate of 18.5 MMT. That's falling into line with other
analysts's ideas that the worst is now over for Ukraine wheat.
There's some talk of current low prices cutting EU corn plantings from current
Plantings are certainly slow in with France, only 4% done versus 17% complete
a year ago in last week's report from FranceAgriMer.
For rapeseed this was the highest close for a front month since before Christmas
helped by reasonably buoyant US soybean values, and lower anticipated EU production
once again in the face of strong demand.
US wheat prices are moving higher - especially so in Chicago - primarily it
would seem under the enormity in size of the fund short position that has been
built up in it.
Russian spring grain plantings are 12.6% complete so far. That's up sharply
compared to this time a year ago. Weather conditions lean favourable for the
time being and prospects for 2016 production appear better than feared.
The Russian Ag Ministry estimate winterkill loses at 800k ha, only half of
the 1.4 million that was being suggested at the height of the winter. The 2016
Russian wheat crop is now expected to beat last year's total at around 62.3
MMT say Agritel.
In Ukraine, whilst a steep decline in winter wheat is still on the cards, production
estimates are nudging higher from some of those being suggested a month or two
Europe's crop appears to be in pretty good shape too, and with bumper carryout
left over from 2015/16 will be looking for every export avenue open to it.
Keep an eye on North Africa then, where heat/dryness has sapped winter crops
and the likes of Morocco, Algeria, Tunisia and Egypt should end up importing
good volumes of EU wheat and barley again, say the HGCA
At the finish,
front month May 16 London wheat was up GBP1.10/tonne at GBP105.15/tonne, May
16 Paris wheat was EUR0.25/tonne lower at EUR151.00/tonne, June corn rose EUR0.25/tonne
to EUR155.75/tonne and rapeseed closed EUR3.50/tonne higher at EUR372.00/tonne.
A Bloomberg survey
forecast this year's coming EU28 soft what crop at 145.8 MMT, from within a
range of 140.77-153.00 MMT, and all wheat output at 154.9 MMT, from within a
range of 15.68-161.70 MMT (USDA all wheat 160.00 MMT in 2015/16). In the case
of all wheat that's a 3.2% fall versus last year.
As far as a nation-by-nation
breakdown goes, the average guess for French soft wheat was 39.4 MMT, with Germany
at 26.0 MMT and the UK at 15.3 MMT.
There's a long
way to go just yet, but for now those figures look about right, although under
pressure I'd tend to favour higher numbers than lower ones right at this moment
There's much debate
too over crop production potential in Ukraine and Russia. Agrtel today released
their latest forecasts, calling for Ukraine wheat in 2016 at 19.3 MMT, up from
17.2-18.1 MMT previously, although down 27% on a year ago.
For Russia they
are now predicting a wheat crop of 62.3 MMT, up from 61 MMT in 2015 from the
shipped out 456 TMT of grains last week, including 330 TMT of wheat, 52 TMT
of corn and 69 TMT of barley. Calendar year to date exports are 9.58 MMT, of
which wheat accounts for 5,38 MMT. Full 2015/6 season to date exports are 32.5
MMT, of which wheat accounts for 21.44 MMT.
meanwhile shipped out 662 TMT of grain last week, including 235 TMT of wheat
425 TMT of corn and 3 TMT of barley.
The picture being
painted then continues to be one of another strong production year in 2016/17,
output mighty be down,, but not by much. Large carryover stocks from 2015/16
still means that we will begin the new season with a larger disposable surplus
than the last.
At the finish, front month May 16 London wheat was down GBP0.05/tonne at GBP104.10/tonne,
May 16 Paris wheat was EUR2.50/tonne easier at EUR151.25/tonne, Jun 16 corn
was up EUR0.50/tonne to EUR156.75/tonne and May 16 rapeseed fell EUR3.25/tonne
For the week, that puts London wheat GBP2.10/tonne weaker, with Paris wheat
shedding EUR3.00/tonne, corn gaining EUR1.75/tonne and rapeseed adding a quarter
of a euro.
European wheat exports have maybe fared a bit better than expected this season,
although carryover volumes from 2014/15 are still high. The outlook for bumper
production again in 2016/17 will likely cap gains for the time being.
Thee re are legitimate concerns over the size of this year's Ukraine wheat
crop due to late planting and adverts winter weather. APK Inform agency peg
winter wheat sowings in Ukraine down 14%, with production of around 21.5% -
down 37 compared to 2015's crop. Some of this decrease will be compensated for
by increased planting and production of corn in Ukraine this year.
The jury is still out on Russia, but losses are not thought likely to be so
In France, winter wheat crop condition ratings were left unchanged on a week
ago at 92% good to very good with 99% of the crop now displaying an ear of at
least 1cm. Winter barley is 91% good to very good and 92% with an ear of at
least 1cm visible. Spring barley is 96% emerged. Corn planting is 4% done versus
17% complete this time last year.
Demand for North Africa and elsewhere remains pretty strong, but competition
for this business is usually fiercely fought over. Euro weakness is an assist
in this department.
The US 2016 wheat harvest will soon be upon us, and that has also escaped the
worst of the winter based on current crop ratings.
US growers traditionally have "longer pockets" than their FWU counterparts,
the latter can't await for the market to "come to them" and must be
in their pitching aggressively from Day 1.
Look for wheat to grind lower heading into harvest pressure...
At the finish,
front month May 16 London wheat was down GBP2.20/tonne at GBP103.10/tonne, May
Paris wheat was EUR0.50/tonne lower at EUR156.25/tonne, June corn jumped EUR0.50/tonne
to EUR156.25/tonne and rapeseed closed EUR2.00/tonne higher at EUR371.75/tonne.
a few downwards adjustments to their French 2015/16 grain ending stocks estimates.
Essentially these were small downwards revisions to carryout due to better than
anticipated exports to North African destinations like Morocco and Algeria that
have shown up in recent tenders.
French wheat stocks
were cut by 0.6 MMT, and those for barley reduced 0.5 TMT, at the end of the
Moroccan millers and the countries wheat trade federation have requested that
this season’s import window is extended to the end of May (rather than
April), and that next season’s window opens in August (typically October).
This suggests further export opportunities for France, but also potentially
UK supplies of wheat," noted the HGCA.
Maize end stocks
(French corn carryout) were also reduced slightly (by 200 TMT), as a result
of higher demand from the domestic starch industry, they added.
It is still worth
remembering that these inventory volumes are still historically high, especially
with another anticipated bumper crop not far away now.
Strategie Grains joined the chorus, reducing EU-28 soft wheat ending stocks
by 1 MMT to 15.6 MMT.
Looking ahead winter
grains in Europe are "in very good condition… with very promising
yield outlooks in France, the UK, Germany, central Europe and south east Europe,"
Strategie Grains said.