EU Grains End Mixed, But Generally Lower On The Week

27/06/14 -- EU grains closed mixed on the day, but mostly lower for the week. Indeed it was only the increasingly erratic and thinly traded Jul 14 London wheat future (where open interest is minuscule at just 8 contracts) that managed to post weekly gains.

The day ended with Jul 14 London wheat up GBP1.00/tonne (although untraded) at GBP141.00/tonne, and with new crop Nov 14 GBP0.40/tonne higher at GBP137.60/tonne. Nov 14 Paris wheat rose EUR1.00/tonne to EUR187.75/tonne, Aug 14 Paris corn was down EUR1.00/tonne to EUR172.50/tonne and Aug 14 Paris rapeseed finished EUR4.75/tonne weaker at EUR347.75/tonne.

For the week that puts Jul 14 London wheat GBP1.50/tonne firmer, but Nov 14 GBP0.75/tonne lower. Nov 14 Paris wheat ended the week EUR0.50/tonne lower than it began it, whilst Aug 14 corn fell EUR3.50/tonne and Aug 14 rapeseed was down EUR5.50/tonne.

Brussels confirmed that they'd issued 193,492 MT worth of EU soft wheat export licences this past week. That volume was comfortably out-stripped however by 405,801 MT worth of corn import licences.

Heavy rain and flooding is said to have damaged up to 25% of Bulgaria's potential 5 MMT wheat crop. There are also said to be problems with too much rain in Romania, although this may be more detrimental to quality than yield. Earlier this week the EU Commission's MARS unit said that they had revised upwards their yield estimates for Romania "thanks to beneficial rains and favourable growing conditions".

In fact, a quick scan through the MARS yield forecasts for soft wheat reveal only one country in the EU's top ten wheat producing nations where yields this year are expected to be below the 5-year average - Italy where yields are forecast down 4.3%.

The remaining top nine producing countries will see yields above the 5-year average, and in all but one of those nine (excluding Spain) yields will at least 3% above the recent norm - including France and Germany. Yields in Poland are seen 6.5% above the 5-year average, Denmark is forecast 7.6% above, the UK is estimated to be 9.1% higher, whilst Bulgaria, Hungary and Romania will all see double digit gains despite their perceived weather problems. Rain makes grain, is what they say.

The rapeseed harvest in the South East of France is already 90% complete, according to Cetiom. Harvesting is spreading north and west.

The French barley harvest is also underway at 6% done nationally, according to FranceAgriMer, and the cutting of wheat is expected to begin next week. The German wheat harvest is said to be generally around 3 weeks away.

FranceAgriMer said that 97% of the French corn crop has at least 6-8 leaves visible compared to only 64% a year ago. They left their winter wheat crop condition ratings unchanged on a week ago at 70% good/very good. Winter barley rated good/very good was also unchanged on last week at 67%, as was corn at 75%, whilst spring barley ratings were cut 2 points to 64% good/very good.

The early harvest in the south of Russia has produced around 2 MMT of grains so far off 536k hectares, with yields averaging 3.68 MT/ha. That's exactly the same yield as a year ago, although 1.2 million ha had been cut then, according to the Ag Ministry.

Competition for export business from the Black Sea region remains fierce. Reuters report that Oman has bought 60 TMT of Russian milling wheat for October shipment at $257/tonne FOB (circa GBP151/tonne).