EU Grains Mixed On Conflicting Global Signals

06/05/14 -- EU grains were mixed, although London wheat was higher, struggling to play catch-up after being closed yesterday.

May 14 London wheat ended up GBP0.40/tonne at GBP167.40/tonne, and with new crop Nov 14 London wheat closing GBP0.60/tonne higher at GBP15880/tonne. May 14 Paris wheat closed EUR1.25/tonne easier at EUR215.50/tonne, Jun 14 Paris corn fell EUR0.25/tonne to EUR185.75/tonne and Aug 14 Paris rapeseed dipped EUR1.25/tonne lower to EUR355.75/tonne.

The talk out of Ukraine continues to suggest problems ahead, yet the Ministry there said today that spring grain planting is 73% complete at 6.1 million hectares, including 3.4 million ha of corn (67% of plan).

Russia meanwhile has sown 1.3 million ha of spring wheat (10% of plan), along with 4.6 million ha of spring barley (52%) and 1.5 million ha (57%) of it's corn.

The USDA's FAS in Ukraine said that the country would produce 20 MMT of wheat this year, down from 22.3 MMT a year ago. They will also turn out 25 MMT of corn (the second highest on record, although down on 30.9 MMT last year), 7.5 MMT of barley (roughly unchanged from 2013), 2 MMT of OSR (versus 2.4 MMT in 2013) and 3.2 MMT of soybeans (compared to 2.8 MMT last year), the FAS forecast.

Ukraine's 2014/15 wheat exports will amount to 9.5 MMT (down from 10 MMT in 2013/14), with those for corn at 17.5 MMT (20.5 MMT), barley unchanged at 2.5 MMT, OSR down to 1.8 MMT (2.2 MMT) and soybeans shipments rising to 2 MMT (1.7 MMT), they added.

Informa Economics pegged the Ukraine 2014 wheat crop slightly higher at 20.5 MMT. They also estimated the 2014/15 world wheat crop at a new record high of 713.1 MMT.

In addition, Informa put the coming global OSR crop at 68.1 MMT, down on 71.7 MMT a year ago. The 2014 total included 21.1 MMT from Europe. They also had the world's corn crop at 963.9 MMT, against 971.4 MMT in 2013/14.

Oil World peg the world's OSR crop at 68 MMT this year, including 21.5 MMT from Europe.

Earlier in the day, Strategie Grains estimated the EU-28 OSR crop at 21.6 MMT, off plantings of 6.8 million ha (versus 6.7 million a year ago), and with yields at 3.19 MT/ah versus 3.13 MT/ha in 2013.

Jordan are tendering for 150 TMT of milling wheat.

The Australian Bureau of Meteorology issued an El Nino weather alert, saying that one could develop as early as July. Normally that would bring relatively cool and wet conditions for the US Midwest, and beneficial summer crop production for most of South America, although winter wheat output could be negatively impacted in Brazil (El Nino typically would bring a wet southern hemisphere winter, which could be detrimental to wheat yields and quality at harvest time).

An improving crop outlook in Europe should continue to point to as more significant downside, rather than rising prices. However, the ever changing daily developments in Ukraine's political situation are keeping the market on a knife edge.