EU Grains Start Week On A Firm Note

15/12/14 -- EU grains finished the day higher, with Jan 15 London wheat up GBP2.25/tonne to GBP132.25/tonne; Jan 15 Paris wheat was EUR1.25/tonne firmer at EUR190.00/tonne; Jan 15 Paris corn rose EUR1.50/tonne to EUR158.75/tonne; Feb 15 Paris rapeseed jumped EUR5.25/tonne to EUR348.00/tonne.

In their final review of the 2013/14 season, the EU Commission's MARS unit said that "generally favourable conditions across the EU-28 have led to forecasted cereal yields that are above the five-year average, except for durum wheat and spring barley. All final cereal crop yields – except those for spring barley – were higher than forecast at the start of the season."

"The average EU-28 soft wheat yield estimate for the 2013-14 season is well above the five-year average and just above last year’s figure. Yield estimates are particularly high for most countries in the central, eastern and northern parts of the EU, such as Germany, the UK, Romania, Denmark and Poland. The yield estimate for France is closer to the five-year average and similar to last year’s result. The estimates for Spain, Slovakia, and Croatia are well below the five-year average", they said.

For barley "EU-28 yields are slightly above the average of the past five years, but below the excellent results of 2013. The season was positive in most of Europe, with the exception of Spain, which was affected by dry weather conditions in spring," they continued.

For corn "yields are at least 25 % above the five-year average in Romania, Hungary and Bulgaria.. A slightly positive campaign is expected in Spain, Poland, the Netherlands, Austria and Lithuania," they added.

"Overall beneficial conditions for rapeseed crops during this campaign resulted in an excellent season in Germany and Poland (forecast yields are among the highest in our database) and a very good season in the UK and France (forecast yields are above the five-year average)," they concluded.

Taking a look at next year's EU crop production potential, Copa Cogeca forecast EU-28 soft wheat plantings to fall 1.6% to 23.92 million ha, with average yields estimated 4.6% lower at 5.84 MT/ha. That pegs production at 139.75 MMT, a 6.2% fall compared to this year.

EU barley production in 2015 is seen 4.6% lower at 55.8 MMT, also on a combination of reduced plantings and a drop in yields. Likewise with corn output, which is estimated 5.7% lower at 68.8 MMT.

The EU-28 rapeseed crop is also estimated to see a reduced planted area and yields next year, with output pegged 6.4% lower at just over 22 MMT.

On a UK specific level, they forecast the 2015 wheat crop falling almost 14% at 14.3 MMT compared to 16.6 MMT this year. They see barley output little changed at 6.9 MMT versus 7.0 MMT this year. They forecast that UK growers to reduce their OSR area by 4% to 647k ha, but with average yields rising to 4.0 MT/ha, they predict production to increase by almost the same percentage to almost 2.6 MMT. I can see a many people shaking their heads at the notion that the UK will produce more rapeseed next year than this, but there we have it.

In the ongoing saga concerning Russia, their Ag Minister was today quoted as saying that whilst there will be no outright embargo, they are "going to change the situation with Russian grain exports through dummy offshore companies" without giving specific details of what action they intend to take.

Meanwhile the Russian Ministry said the the 2014 grain harvest was essentially now over at 110.8 MMT in bunker weight. Wheat accounts for 62.3 MMT of that, barley 21.2 MMT and corn a further 11.6 MMT.

Customs data shows that Russia exported a record 637.7 MMT of barley in October, up 26% versus September and 60% above a year previously. That takes exports for the first four months of the season to more than 1.9 MMT, which is 20% up year-on-year and also a record. Saudi Arabia took more than half that total.

APK Inform estimate Russia's 2014/15 barley exports at 4 MMT, up 48% on last year.

The same firm also forecast Ukraine's 2014/15 grain exports at a record 32.6 MMT, up 2% compared to last season. They see wheat exports at 10.8 MMT (+16.4%) and those for barley at 3.4 MMT (+37.6%). Corn shipments will however fall to 18 MMT, which is 8.8% lower than last season's record volume.

The Ukraine Ag Ministry said that winter grain emergence was now at 95%, rating 82% of what has emerged as being in good to satisfactory condition and 18% weak/thinned.

Most of the major winter cropping areas of Russia and Ukraine are currently experiencing warmer than normal temperatures, with these conditions expected to last for the next 10-14 days. That may not necessarily be such a good thing, as what snow cover there is is now melting, and could soon have totally disappeared in the most productive areas of the Ukrainian and Russian plains, say Agritel.