EU Grains End In The Red On Harvest Pressure, Stiff FSU Competition

24/06/14 -- EU grains closed in the red, reverting to the dominant downwards trend after a modest attempt at consolidation and a bit of short-covering/profit-taking in recent days.

The day ended with Jul 14 London wheat down GBP4.00/tonne at GBP140.00/tonne, and with new crop Nov 14 GBP1.75/tonne lower at GBP136.75tonne. Nov 14 Paris wheat fell EUR2.00/tonne to EUR186.50/tonne, Aug 14 Paris corn was down EUR1.00/tonne to EUR174.50/tonne and Aug 14 Paris rapeseed finished EUR1.50/tonne weaker at EUR349.00/tonne.

The combines are already rolling in Russia and Ukraine, harvesting mostly barley, but also a small volume of new crop winter wheat. They will soon be harvesting wheat in earnest.

Ukraine said yesterday that growers there had already cut over 300k ha of winter grains, producing 839 TMT of new crop grain so far. Most of that is winter barley (813 TMT), although some winter wheat (25 TMT) has also been cut.

Ukraine's 2013/14 grain exports meanwhile now stand at in excess of 32 MMT (record), including over 20 MMT of corn and in excess of 9 MMT of wheat, with just a week of the old campaign left remaining.

They are expected to harvest another big crop, and remain an aggressive exporter, again this year. A recent Reuters survey placed the 2014/15 Ukraine grain crop at an average guess of 59 MMT (versus 63 MMT last year), and with exports almost matching this season at 31 MMT.

Russia is also still busy exporting. Rusagrotrans raised their forecast of Russian grain exports in June to 700-800 TMT from a previous estimate of 500-600 TMT.

Russian grain exports this season are expected to finish at around 25.5 MMT, rising to 27.5 MMT in 2014/15 according to the same Reuters survey referred to earlier.

Russian spring grain planting is just about finished, with 13 million hectares of wheat, 8.8 million ha of barley and 2.7 million ha of corn now sown. Russian growers have also planted 963k ha of spring rapeseed, which is 88% of the government forecast.

Egypt said that they've bought 3.7 MMT of wheat on the domestic market so far, from their newly harvested 2014 crop. That, along with existing tender purchases leaves the government with 6 months worth of requirements in hand, they said.

The pound traded off the recent multi-year highs of over 1.25 against the euro and 1.70 versus the US dollar, although further sterling appreciation is still expected in the second half of 2014, hurting UK export prospects.