Chicago Grain Market Closing Commentary - Thursday

21/08/14 -- Weather, from Martell Crop Projections: Corn and soybeans will benefit from heavy soaking rain this week but delayed crop development is still a worry. Strong thunderstorms were rolling across the Upper Midwest this morning causing heavy rain in Minnesota and northern Iowa. Yesterday a rash of thunderstorms moved through central Iowa improving soil moisture. Heavy soaking rain was needed after a 30-day stretch of dryness previously. Soybeans especially need soaking rain to boost pod filling, as August rainfall is the key indicator for the yield. The highest soybean yields on record were achieved from very heavy August rainfall. The Midwest forecast remains wet with expectations for 1.75–3 inches of rainfall the next several days. These would be recurring showers in a trough of low pressure from central Nebraska to northwest Wisconsin. Some farms may receive 4-5 inches of rainfall with strong thunderstorms, more than the August monthly rainfall allotment.

Soycomplex: Beans remain trading in a "game of two halves" as a football pundit might say. Old crop tightness due to strong demand for both beans and meal continues to support the front-end. The promise of a huge US harvest to come, likely followed up by record South American plantings weighs on the deferred positions. Reuters reported that members of Brazil's largest co-operative plan to increase their soybean planted area by 8.4% this year. New crop Nov 14 beans made a fresh contract low. Day three of the ProFarmer crop tour hit Illinois, finding an average bean pod count of 1,299.17 versus 1,115.97 a year ago and the 3 year average of 1,085.35 pods. In Western Iowa the pod count was 1,091-1,224 versus 802.98-1,101.49 a year ago and the 3 year average of 962-1,091 pods. The final day of the tour concludes in Minnesota and the rest of Iowa today. Final data from the tour is due out on Friday. Chinese customs data showed that the country imported almost 7.5 MMT of soybeans in July, taking Jan/Jul imports to 41.7 MMT, a 20% hike compared to the same period in 2013. Of that total almost 21 MMT came from Brazil, and a further 17.3 MMT from the US. Weekly export sales came in at negative 89,600 MT on old crop and a net 1,420,600 MT on new crop, the latter being primarily for China (947,900 MT). Meal sales were 99,800 MT on old crop and 78,600 MT on new crop. The 2013/14 marketing year finishes at the end of August. The US has now shipped 44.2 MMT of soybeans this season, with outstanding sales of a further 1.85 MMT. The current USDA forecast is for net exports of 44.6 MMT in 2013/14. Lanworth estimated US 2014 soybean yields at a record 46.7 bu/acre versus a previous estimate of 46.4 bu/acre, and 1.3 bu/acre more than the where the USDA currently sit. Lanworth now put the US 2014 soybean crop at 3.855 billion bushels versus a previous estimate of 3.806 billion and the USDA's 3.816 billion. Stats Canada estimated the 2014 canola crop there ar 13.9 MMT versus the average trade guess of 14.5 MMT and production of nearly 18 MMT a year ago. They see the Canadian soybean crop at 5.9 MMT versus the average trade estimate of 6.1 MMT, although still significantly higher than 5.2 MMT a year ago. Sep 14 Soybeans closed at $11.36 1/4, up 16 1/2 cents; Nov 14 Soybeans closed at $10.38 1/4, up 1/4 cent; Sep 14 Soybean Meal closed at $413.80, up $11.20; Sep 14 Soybean Oil closed at 32.78, down 8 points.

Corn: The corn market closed a cent or two higher. Despite new crop soybeans setting contract lows, the pull to plant beans instead of corn or wheat is still quite strong. The same Brazilian co-op that said they'd be increasing their soybean plantings for 2014/15 also said that they'd reduce the area given over to corn by around 9%. The Buenos Aires Grain Exchange also said that Argentine farmers would reduce their corn area later this year by around 10% to 3.2 million hectares. They estimated that the 2013/14 Argentine corn harvest was now 94.2% complete at close to 24 MMT, leaving their final production forecast unchanged at 25 MMT. Day three of the ProFarmer crop tour entered Illinois, where the average corn yield this year was estimated at a record 196.96 bu/acre versus 170.48 bu/acre a year ago and the 3 year average of 149.36 bu/acre. In Western Iowa they found an average corn yield of 177.48-180.90 bu/acre versus 160.12–175.65 bu/acre a year ago and the 3 year average of 146.77-170.72 bu/acre. The Chinese insatiable appetite for soybean imports doesn't extend to corn. They only imported 86,369 MT of that last month, soybean imports were more than 86 times higher than that! China's Jan/Jul corn import total is now 1.46 MMT, down more than 8% versus the same period in 2013. America's corn exports to China are down 37% so far this year. Weekly export sales came in at just under 100 TMT of old crop, along with 719,300 MT of new crop. Old crop shipments to date are just under 44.9 MMT, with a further 3.85 MMT of outstanding sales. The USDA forecast for the season is for exports of 49 MMT, which now clearly looks unlikely, leaving a larger than anticipated ending stocks situation to carry over into what looks like being a huge 2014/15 production year. Lanworth estimated US 2014 corn yields at a record large 174.5 bu/acre, even if that is down a little on their previous estimate of 174.8 bu/acre. The USDA are more than 7 bu/acre lower than that at 167.4 bu/acre. Lanworth put production this year at 14.734 billion bushels versus a previous estimate of 14.766 billion and the USDA's 14.032 billion. Commodity Weather Group estimated US corn yields at 171.5 bu/acre versus a previous estimate of 171.0 bu/acre. Stats Canada estimated the corn crop there this year at 11.43 MMT, just below the average trade guess of 11.5 MMT and up slightly on 11.3 MMT a year ago. Sep 14 Corn closed at $3.62, up 2 1/2 cents; Dec 14 Corn closed at $3.68 3/4, up 1 1/4 cents.

Wheat: The wheat market closed higher. Stats Canada pegged the Canadian all wheat crop below expectations of 28.5 MMT at 27.7 MMT, and a 26% reduction on last year's record. Weekly export sales weren't great at 209,200 MT, being down 38 percent from the previous week and 62 percent below the prior 4-week average. That was the smallest weekly figure of the marketing year so far. That began on June 1. Significantly Brazil cancelled 58,800 MT now that they've re-introduced the 10% import duty on wheat shipped in from outside the Mercosur trade group. Japan bought 146,858 MT of milling wheat for Sept-Nov shipment. The breakdown was: 37,885 MT of western white US wheat; 20,480 MT of HRW US wheat; 31,421 MT of dark northern spring US wheat; 26,657 MT of Canadian western red spring wheat; 30,415 MT of Australian white wheat. China said that it had imported 116,718 MT of wheat in July, down 62.2% from a year ago. Jan/Jul imports are now 2.67 MMT, which is up 56.6% from a year ago. Of that total 782,527MT has come from the US, up 38% from a year ago. They are also importing large volumes of barley, with the Jan/Jun total at 3.2 MMT, up 167% from a year ago. The Argentine Ag Ministry estimated the 2014/15 Argentina wheat area at 4.5 million hectares, unchanged from their previous estimate and versus the Buenos Aires Grain Exchange estimate of 4.1 million. Plantings last year were only 3.65 million ha. The Ukraine Ag Ministry estimated their 2014/15 exportable grain surplus at 30.0 MMT or more, saying that there was no need to restrict milling wheat exports, effectively because the market would regulate itself. Russia said that they'd now harvested 68.5 MMT of grain so far this year off less than 49% of the planned area. That total includes 45.1 MMT of wheat off barely more than 50% of plan, plus a further 14.7 MMT of barley off 58.5% of plan. Russian grain exports are flying, with those in July being a record for that particular month, and those in August now forecast to be the highest for any month ever. Reuters reported that France are importing milling wheat from Lithuania and the UK. Strategie Grains increased their estimate for the proportion of French crop wheat crop that will cut the milling wheat mustard to 64% from 62% previously, although still well behind 88% a year ago. Sep 14 CBOT Wheat closed at $5.46 1/4, up 6 3/4 cents; Sep 14 KCBT Wheat closed at $6.22, up 3 1/4 cents; Sep 14 MGEX Wheat closed at $6.16, up 5 3/4 cents.

EU Grains Little Changed, Key Support Holds In Wheat

21/08/14 -- EU grains closed mixed, but mostly a little higher, with London wheat again testing but holding above the GBP120/tonne level, although the HGCA said that a close below that level was probably likely in the coming days.

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.

Chicago Markets Mostly Lower As Large US Soy And Corn Crops Loom

20/08/14 -- Soycomplex: Beans closed lower, with funds selling an estimated net 5,000 contracts on the day on the outlook for a bin busting US crop this year. Today is the third day of the ProFarmer US Midwest crop tour, where they will be in Illinois and Western Iowa, with some decent pod counts expected. On day two they were in Indiana where the average bean count was estimated at 1,220.79 pods per square yard versus 1,185.14 a year ago and the 3 year average of 1,118.65 pods. They were also in Nebraska where the average bean count was estimated at 1,103.26 pods versus 1,138.94 a year ago and the 3 year average of 1,106.62 pods. Hear that Dr Cordonnier estimated 2014 US bean yields at 45.0 bu/acre, unchanged from his previous estimate. The USDA announced today 110,000 MT of US beans sold to Vietnam for 2014/15 shipment under the daily reporting system. Soybean prices remain relatively buoyant compared to those of corn and wheat, which is expected to encourage record plantings in South America again later this year. Trade estimates for tomorrow's weekly export sales report for beans are around 50-60 TMT of old crop and 750-950 TMT of new crop. Sep 14 Soybeans closed at $11.19 3/4, down 1/2 cent; Nov 14 Soybeans closed at $10.38, down 14 3/4 cents; Sep 14 Soybean Meal closed at $402.60, up $2.80; Sep 14 Soybean Oil closed at 32.86, up 20 points.

Corn: The corn market closed around 3-5 cents lower as the trade anticipates a huge US corn crop to be on the way again this year. Day two of the ProFarmer crop tour reported Indiana corn yields estimated at a record 185.03 bu/acre versus 167.36 bu/acre a year ago and far higher than the 3 year average of 141.24 bu/acre. In Nebraska corn yields were estimated at 163.77 bu/acre versus 154.93 bu/acre a year ago and the 3 year average of only 146.81 bu/acre. Allendale said the tour will likely find even bigger crop yields when it moves into the top producing states of Iowa and Illinois today. Hear that Dr Cordonnier estimated 2014 national US corn yields at a record 169.0 bu/acre, unchanged from his previous estimate. The early 2014 Russian corn harvest is now underway in the south of the country. Ukraine are a little further away from the beginning of their harvest. Both are expected to be eager sellers as soon as they get their new crop in. Ukraine new crop corn is reportedly offered around $182/tonne FOB the Black Sea. On the US weather front "The forecast continues very wet, though rainfall to date has been disappointing. A swath of very heavy rainfall, 3-4 inches, is predicted in eastern Nebraska, Iowa, southern Minnesota and Wisconsin this week," said Martell Crop Projections. Trade expectations for tomorrow's weekly export sales for corn are around 750 TMT to 1.1 MMT. Sep 14 Corn closed at $3.59 1/2, down 3 cents; Dec 14 Corn closed at $3.67 1/2, down 4 3/4 cents.

Wheat: The wheat market closed around 6 cents lower across all three exchanges. Taiwan is tendering for 99,410 MT of US milling wheat for Oct-Nov shipment. Japan are tendering for 146,858 MT of milling wheat for Sept-Nov shipment in their regular combo of US, Canadian and Australian origin. The Russian grain harvest tonight stands at 67.2 MMT, according to the Ag Ministry, with average yields of 3.04 MT/ha representing a 19.2% rise on this time last year. Wheat accounts for 44.9 MMT of that total, with barley adding a further 14.3 MMT. Kazakhstan said that it could export as much as 8 MMT of grain this season, despite a fall in production, due to it having fairly large carryover stocks from last year's harvest. Exports in 2013/14 were 8.7 MMT, according to the Ag Ministry. Stats Canada are out tomorrow with their latest crop production estimates. The average trade guess for the Canadian all wheat crop is around 28.5 MMT, although the range of estimates is quite wide at 26.2-34.5 MMT. Production last year was a record 37.5 MMT. There's much talk about the quality of this year's Ukraine wheat crop, and their relative recent absence from the milling wheat export market. Now we hear that Ukraine flour millers have asked for a temporary halt on milling wheat exports until a proper assessment of the quality of this year's crop can be done. Trade estimates for tomorrow's weekly export sales report are around 500-600 TMT. Sep 14 CBOT Wheat closed at $5.39 1/2, down 6 1/2 cents; Sep 14 KCBT Wheat closed at $6.18 3/4, down 5 3/4 cents; Sep 14 MGEX Wheat closed at $6.10 1/4, down 6 1/2 cents.

EU Wheat Testing Long Term Support Levels

20/08/14 -- EU grains closed mostly lower, with London and Paris wheat again testing support at GBP120/tonne and EUR170/tonne respectively.

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.

EU Rapemeal Prices

20/08/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:


Chicago Wheat Rises, By Mistake!

19/08/14 -- Soycomplex: Beans closed mostly lower save for the front end, as too did meal. The one point improvement in last night's crop ratings was seen as a bit bearish for new crop. Oil World said that they expect "very large" Brazilian soybean crushings and exports to cut the country's Sep 1 soybean stocks to only 17.7 MMT. That's not much considering that they harvested a record 87.5 MMT crop this year, according to the USDA. It also doesn't leave much to go round for the remaining 4 months of the calendar year. Brazil of course won't start harvesting new crop beans until January, and traditionally doesn't get going again on the export front until Feb/Mar time. That potentially means big demand for US beans in the Sep/Dec period, especially if Argentine export volumes and farmer selling remains subdued. ProFarmer are mid-way through their 4-day crop tour, although they don't issue soybean yield estimates,they do pod counts instead. Yesterday's findings revealed an Ohio average bean pod count of 1,342.42 pods per square yard plot versus 1,283.61 pods a year ago and the 3 year average of 1,190.18 pods. In South Dakota the average bean pod count was 1,057.80 pods versus 1,016.68 pods a year ago and the 3 year average of 902.76 pods. Sep 14 Soybeans closed at $11.20 1/4, up 4 3/4 cents; Nov 14 Soybeans closed at $10.52 3/4, down 5 cents; Sep 14 Soybean Meal closed at $399.80, up $7.70; Sep 14 Soybean Oil closed at 32.66, down 30 points.

Corn: The corn market closed slightly higher. Yesterday's one point drop in crop condition ratings from the USDA was a little supportive, although 72% good/excellent is still a high number. There was a bit of support from a firmer wheat market. The vibe coming back from the ProFarmer crop tour is mixed. Yesterday's results threw up a potential Ohio corn yield estimate of 182.11 bu/acre versus 171.64 bu/acre a year ago and far higher than the 3 year average of 146.13 bu/acre. In South Dakota the 2014 corn yield was estimated at 152.71 bu/acre versus 161.75 bu/acre a year ago and the 3 year average of 125.70 bu/acre. Today the tour moved on to Nebraska, where they estimated the average corn yield at 163.77 bu/acre versus the 154.93 bu/acre estimated by the tour last year and the group's three-year average of 146.81 bu/acre. Things look even better in Indiana where they forecast a 2014 corn yield of 185.03 bu/acre, up from last year’s 167.36 bu/acre and much better than the three-year tour average of 141.24 bu/acre. That figure, if achieved, would be a record for the state. US weather forecasts remain mostly favourable, with rain moving through Illinois into Indiana today. The market still believes that average 2014 US yields will end up around the 170 bu/acre mark. Sep 14 Corn closed at $3.62 1/2, up 1 3/4 cents; Dec 14 Corn closed at $3.72 1/4, up 3/4 cent.

Wheat: The wheat market closed firmer, although well off the day's highs. A news report that suggested that the Ukraine PM had said that the country could lose 15% of it's grain crop this year due to the ongoing fighting in the east was probably to blame. That would indeed be a bullish factor, should it be true. Consider though that the Ukraine Ministry have already said this week that the early grain harvest is already 98% complete on a national level. A spokesman for the PM later said that this referred to 15% of the crop in the regions where the fighting is taking place, Donetsk and Luhansk, where last year's grain harvest was 2.2 MMT and 1.3 MMT respectively. That equates to around a combined (or in this case not combined, if you get the pun) 525 TMT of grain lost. That's hardly a market-moving volume in the overall scheme of things, and the vast majority of that tonnage is likely to be corn. Exports from the country appear to be continuing as normal. The Ukraine Ministry said that the country had exported 3.578 MMT of grains so far this season, including 1.739 MMT of wheat, 1.428 MMT of barley and 368 TMT of corn. Germany's DBV raised their forecast for the country's 2014 grain harvest to 50 MMT, including 26.2 MMT of wheat. The latter is up from a previous forecast of 24.6 MMT and compares to 25 MMT a year ago. Sep 14 CBOT Wheat closed at $5.46, up 3 1/2 cents; Sep 14 KCBT Wheat closed at $6.24 1/2, up 6 3/4 cents; Sep 14 MGEX Wheat closed at $6.16 3/4, up 8 1/2 cents.

EU Grains Mixed, Rains Add Volume If Not Quality

19/08/14 -- EU grains closed mixed, with both London and Paris wheat struggling to keep their heads above water. Support at GBP120/tonne and EUR170/tonne only just held. Nerves over Russia/Ukraine have eased a little, although the Ukraine PM said that 15% of the crops in the troubled Donetsk and Luhansk regions could be lost due to the ongoing conflict in the area.

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.