EU grains closed mostly lower. There wasn't a lot of bullish news around to start the week, as tensions in Ukraine seem to have eased a little over the weekend.
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.