EU Grains Little Changed With US Markets Shut

01/09/14 -- As is often the case, with US markets closed for the Labor Day holiday, this was never going to be a thriller - and so it proved with little change either way in thin volume.

The day ended with Nov 14 London wheat down GBP0.25/tonne at GBP121.55/tonne, Nov 14 Paris wheat fell EUR0.50/tonne to EUR173.75/tonne, Nov 14 Paris corn was unchanged at EUR151.75/tonne and Nov 14 Paris rapeseed was EUR0.25/tonne lower at EUR323.50/tonne.

FranceAgriMer told us on Friday that the French early grain harvest was now just about over. As yet, there's little definitive news regarding the quality of this year's wheat crop, save for the fact that it's down on last year.

Meteo France said that the Jul/Aug period was the wettest since 1959, with the country getting 40% more rainfall than normal.

News emerged last week that as well as buying Lithuanian and UK wheat, the French were also importing from Latvia to bolster up the quality of this year's harvest, even if Algeria have already stated that they won't accept wheat of two different origins against any of their tenders.

This still leaves an unusually large volume of French feed wheat to market this year, and unlike UK growers they are keen to find export homes, so French wheat is currently priced well under UK origin material at the moment.

The jury is still out with regards to the quality of this year's German wheat crop, with an estimated 10% or so still to be harvested. The German Ag Ministry seem to think that "rain makes grain" as far as quantity is concerned though, on Friday they raised their estimate for this year's wheat crop to almost 28 MMT, a near 12% rise on last year.

They also forecast a 2014 German winter barley harvest 13.5% higher than a year ago at 9.5 MMT, along with a 7.9% rise in spring barley production to 2.1 MMT and a 4.9% increase in corn output to 4.6 MMT.

In addition they pegged the 2014 German rapeseed crop at 6.2 MMT, a 7.7% rise versus last year.

There's been no improvement in the situation in eastern Ukraine over the weekend, although grain exports from the country remain apparently unhindered. APK Inform said that Ukraine's seaports had exported 664 TMT of grains in the past week, a 13% increase on the week before. That total included 393 TMT of wheat and 271 TMT of barley.

It remains to be seen whether Ukraine growers will plant a normal winter grains area this year, or wait until the spring to see if there's been an improvement in stability in the region.

Russia's harvest juggernaut rolls on. They've now produced 74.3 MMT of grains this harvest, off barely more than half the planned area - 55.6% in fact. Wheat accounts for 47.3 MMT of that total, and barley a further 16.9 MMT. They are just getting going on corn, which is 2.6% harvested producing 385 TMT to date.

SovEcon said that they expect Russia to have exported a record 4.1 MMT of grains in August, most of which (3.7 MMT) will have been wheat. July exports of 3.2 MMT were a record for that particular month as they waste no time in turning what looks like being a very large, possibly post-Soviet era record, harvest into cash. The weak rouble is making domestic prices a bit more palatable.

Turkey are shopping for 200 TMT of milling wheat for Sep/Oct and Oct/Nov shipment, with Russian origin possibly the most likely source.

EU Rapemeal Prices

01/09/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session. For your own personal interest, I've convert these to approximate sterling equivalent values too. The values in the sterling change column may not match those in the euro change column due on currency fluctuations:



MONTH
EUR
EUR CHG
STG
STG CHG
Sep14
197.00
unch
155.75
-0.75
Oct14
203.00
+1.00
160.50
unch
Nov14/Jan15
205.00
-1.00
161.25
-2.50
Feb/Apr15
207.00
unch
163.75
-0.75
May/Jul15
207.00
unch
163.75
-0.75
Aug/Oct15
202.00
-1.00
159.75
-1.75

Chicago Grains Mostly Lower Ahead Of Long Weekend

29/08/14 -- Soycomplex: Beans closed higher on front end Sep 14, but lower on the rest heading into the 3-day weekend with the market closed on Monday for Labor Day. The USDA announced 123,000 MT of US beans sold to unknown for 2014/15 delivery. The International Grains Council made only a few small changes to their 2014/15 global soybean balance sheet. These included a small rise in production for the US, up from 103.4 MMT to 103.8 MMT. "Abundant rains continued to benefit US soybean crops, with output forecast slightly higher, at a new record. While southern hemisphere fields are yet to be seeded, output is also projected to increase in Brazil and Argentina," they said. Sep 14 Soybeans closed at $10.89 1/2, up 15 3/4 cents; Nov 14 Soybeans closed at $10.24 1/4, down 4 1/2 cents; Sep 14 Soybean Meal closed at $439.50, up $6.30; Sep 14 Soybean Oil closed at 32.04, down 60 points. For the week Sep 14 beans were down 76 1/2 cents, with meal gaining $6.20 and oil losing 32 points.

Corn: The corn market closed lower with fund money estimated as selling around a net 7,000 contracts on the day. The IGC increased their forecast for the 2014/15 global corn crop by 4 MMT from last month to 973 MMT. "Northern hemisphere yield prospects continued to improve in August, including in the US, where crops have benefitted from a prolonged period of benign weather," they said. They increased their production estimate for the US by 2 MMT to a record 355 MMT, with Europe up by 1.4 MMT to 67.8 MMT and Ukraine raised by 1 MMT to 27.5 MMT. China's crop was left unchanged at 220 MMT, with imports also unchanged at 3.5 MMT. World corn ending stocks were raised 3 MMT to 190 MMT, which they said was the largest since 1987/88. South Korea's Kocopia bought 55,000 MT of optional origin corn for Jan shipment. Sep 14 Corn closed at $3.59, down 2 3/4 cents; Dec 14 Corn closed at $3.64 3/4, down 4 1/2 cents. For the week Sep 14 corn was down 6 1/2 cents, with Dec 14 falling 6 3/4 cents.

Wheat: The wheat market closed mixed, lower in Chicago and Kansas and firmer in Minneapolis. The IGC raised their forecast for the 2014/15 global wheat crop by 11 MMT to 713 MMT, which would now match last season's record output. Ending stocks also got a hike, up 3 MMT to 59 MMT. The main production increases came from Russia (up 5 MMT from last month to 60 MMT) and Europe (up 3.8 MMT to 150.8 MMT). There was also a small rise in the size of the US all wheat crop, up 0.5 MMT to 55 MMT. "The world harvest will include an above average proportion of low/medium grade supplies," they noted. "While market sentiment remained mostly bearish, concerns about crop quality and the conflict in Ukraine provided underpinning," they added. Iraq are tendering for 180 TMT of feed barley and 120 TMT of corn for Sep/Oct shipment. Sep 14 CBOT Wheat closed at $5.50 1/4, down 6 1/4 cents; Sep 14 KCBT Wheat closed at $6.26 1/4, down 8 3/4 cents; Sep 14 MGEX Wheat closed at $6.15, up 3 cents. For the week that puts Chicago wheat down 1 3/4 cents, with Kansas falling 7 1/4 cents and Minneapolis down 11 3/4 cents.

EU Grains Developing Sideways Trade

29/08/14 -- EU grains closed mostly lower on the day, and little changed for the week, with the trade starting to develop a sideways pattern.

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.

EU Rapemeal Prices

29/08/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session. For your own personal interest, I've also convert these to approximate sterling equivalent values too:



MONTH
EUR
EUR CHG
STG
STG CHG
Sep14
197.00
+2.00
156.50
+1.25
Oct14
202.00
+3.50
160.50
+2.50
Nov14/Jan15
206.00
+4.00
163.75
+3.00
Feb/Apr15
207.00
+4.00
164.50
+2.75
May/Jul15
207.00
+4.00
164.50
+2.75
Aug/Oct15
203.00
+3.00
161.50
+2.25

Chicago Closing Comments - Thursday

28/08/14 -- Soycomplex: Beans closed mixed. Weekly export inspections came in at net reductions of 62,800 MT on old crop and net sales of a healthy 1,290,800 MT on new crop. It will come as no surprise to hear that China was the largest buyer on the new crop taking 655,000 MT. The new crop sales beat expectations of 750 TMT to 1.1 MMT. Other news was generally lacking, MDA CropCast left their forecast for the 2014 US soybean crop unchanged from last week at 3.704 billion bushels. There's talk of Sudden Death Syndrome (SDS) popping up in isolated cases in US soybean fields. Sep 14 Soybeans closed at $10.73 3/4, down 12 cents; Nov 14 Soybeans closed at $10.28 3/4, up 5 cents; Sep 14 Soybean Meal closed at $433.20, up $16.70; Sep 14 Soybean Oil closed at 32.64, down 3 points.

Corn: The corn market closed around 4-5 cents higher. Weekly export sales came in at net reductions of 32,700 MT on old crop and net sales of 695,600 MT on the new crop. The latter was in line with trade estimates of 450-750 TMT. MDA CropCast left their estimate for the 2014 US corn crop unchanged from last week at 14.427 billion bushels. South Korea's MFG bought 136,000 MT of optional origin corn for Jan–Feb shipment. South Korea's KOCOPIA seek 55,000 MT of optional origin corn for Jan shipment. China sold 151,132 MT of corn at auction. Brazil are said to be attempting to auction 1.75 MMT of corn today. Firmer wheat markets on the back of the Russian "invasion" of Ukraine added support to corn. Sep 14 Corn closed at $3.61 3/4, up 5 3/4 cents; Dec 14 Corn closed at $3.69 1/4, up 4 1/4 cents.

Wheat: The wheat market closed higher following the news that Russian forces had crossed the border in Ukraine. Nato released satellite images it said showed Russian forces inside Ukraine. Russia denied the reports. That was enough to encourage some nervous short-covering in wheat though. Weekly export sales were "ho hum" at 403,600 MT. Interestingly Brazil took 94,000 MT of that, despite having recently re-introduced the 10% duty on wheat imports from outside the Mercosur trade bloc. MDA CropCast raised their forecast for the EU-28 wheat crop by 510 TMT to 145.3 MMT, a 4.8% rise year-on-year. The Buenos Aires Grain Exchange said that "torrential" rain in Argentina was putting the 2014/15 wheat crop there at risk. Sep 14 CBOT Wheat closed at $5.56 1/2, up 9 1/4 cents; Sep 14 KCBT Wheat closed at $6.35, up 7 cents; Sep 14 MGEX Wheat closed at $6.12, up 1 3/4 cents.

EU Grains Rise On Russian Worries

28/08/14 -- EU grains rose following news reports that Russian forces had mounted a military offensive in Eastern Ukraine. This prompted some short-covering, and possibly encouraged a little bit of spec buying too. Traders will recall that Chicago wheat jumped almost 30% following the Russian invasion of Crimea, even if it did subsequently give up all those gains, and then some.

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.