EU Grains Mixed, Strong Exports Underpin

20/09/13 -- EU grains closed mixed but mostly lower with Nov 13 London wheat settling GBP0.15/tonne lower at EUR151.70/tonne and Jan 14 GBP0.65/tonne easier at GBP154.00/tonne. Nov 13 Paris milling wheat was unchanged at EUR185.75/tonne whilst Nov 13 Paris rapeseed slumped EUR5.75/tonne to EUR363.00/tonne.

For the week Nov 13 London wheat was down GBP0.80/tonne, with Paris wheat down EUR0.50/tonne and rapeseed EUR13.00/tonne lower.

Fresh news was relatively scarce, but falling US markets, led by soybeans, set the tone.

Defra made a few minor tweaks to their English provisional planted area figures, coming up with a final wheat area of just over 1.5 million hectares, a 19% drop on last year and the smallest area since the early 1980's. Barley plantings were up 33% overall, courtesy of a near doubling in the spring barley area to 571,000 ha. The area given over to oats was up 50% to 138,000 ha, with linseed, beans and peas all up by around a quarter. The total OSR area was down 5% to 676,000 ha.

The strong pace of EU soft wheat exports continues to underpin the MATIF market in particular. The total volume of export licences granted so far this year now stands at 5.73 MMT, nearly double the 2.9 MMT that had been issued this time last year. France (1.6 MMT), Germany (1.58 MMT) and Romania (990 TMT) are the biggest exporters.

The largest recipients this week were the Netherlands, with 142 TMT, and Lithuania with 128 TMT, ahead of France with 87 TMT.

In contrast the UK didn't request any export licences again this week, and has only been granted 3,600 MT worth so far this season. Wheat import licences into the UK currently stand at 86,587 MT, and those for corn are at 47,247 MT.

Interest in EU wheat remains buoyant amidst ongoing concerns over quality with the stalled Russian and Kazakh harvests. There's talk that Egypt will soon start to turn it's attention to French wheat once Romania sells out and Ukraine begin to focus on exporting their record corn crop.

In Russia, Siberia and the Volga and Central regions have been plagued by almost constant rain this past week. Their grain harvest is only 70% complete versus 53.5% at the beginning of the month, almost three weeks ago. The wheat harvest has only advanced from 55% done to 71% complete, with barley up from 63% to less than 78%, during this time.

Wheat yields are still holding up despite the weather though, at 2.53 MT/ha versus 1.86 MT/ha this time last year, but quality will surely be taking a hit.

The Kazakh grain harvest meanwhile is also making slow progress under similar conditions. Much of the west of the country has received at least double its normal precipitation in the past fortnight, with some parts getting 3-4 time their usual September rains. The Kazakh harvest currently stands at 11.87 MMT off 62% of the combinable crop area, although as with Russia yields are significantly better than a year ago at 1.21 MT/ha versus just 0.86 MT/ha in 2012.

Hungary's crop is in the bin however, and in common with most of Eastern Europe things are much better than last year. They've harvested a wheat crop of 5.14 MMT, up 28% on 2012, with barley production of 1.1 MMT representing a 10% rise versus last season.