EU Wheat Declines, French, UK And EU Stocks All Seen Rising

10/12/14 -- EU grains finished the day lower, with Jan 15 London wheat down GBP1.20/tonne to GBP127.60/tonne; Jan 15 Paris wheat was EUR2.25/tonne easier at EUR184.25/tonne; Jan 15 Paris corn fell EUR1.25/tonne to EUR155.50/tonne; Feb 15 Paris rapeseed ended EUR3.50/tonne weaker at EUR339.50/tonne.

France said that it had exported 1.68 MMT of soft wheat in October, a near 17% rise on a year previously. The top homes were Algeria (293 TMT) and Egypt (252 TMT).

FranceAgriMer increased their forecast for French soft wheat exports by 1% from last month to 17.28 MMT for the current season. Even so that's still 13% lower than the volume shipped out in 2013/14. Ending stocks will therefore rise almost 6% to 4.547 MMT, they predict.

They also increased their forecast for French barley exports, up 3% from last month to 6.1 MMT. That's also a 20% jump on last season. Even so, ending stocks here are also still up year-on-year, seen rising more than 25% to 1.3 MMT.

They said that this year's French grain harvest was 71 MMT, a 7% rise versus 2013. Wheat production was up 2% to 37.1 MMT, and barley output up 13% to 11.7 MMT, they said. The 2014 French corn crop finally came in at 17.3 MMT, an all time high and a 19% increase compared to 12 months ago, despite a lower planted area, they added.

The UK meanwhile had it's best wheat export month of the season so far in October, shipping out more than 218 TMT. Spain was the largest buyer, with (unusually) Algeria in second place. That takes exports for the season so far (Jul/Oct) to almost 507 TMT.

That would put us in line to export 2 MMT of wheat in 2014/15, if we continue at the same pace. Defra estimate the UK exportable surplus at 3.5 MMT this season.

Late in the day the USDA released their December world supply and demand numbers. EU wheat exports were raised by 1 MMT from last month to 29 MMT for the current season. That's still a reduction of almost 2 MMT on last season though, despite the fact that current exports are ahead of even last year's record pace.

Russia's wheat exports in 2014/15 were trimmed from 22.5 MMT to 22 MMT (although that's still a record volume), and Ukraine's were tweaked higher, up from 10 MMT to 10.3 MMT. There was also a 0.5 MMT increase for Kazakhstan to 5.8 MMT. Egypt's imports were increased from 9.5 MMT to 10 MMT.

Wheat production in Europe this season was left unchanged at 155.4 MMT, consumption was lowered 1.5 MMT to 126.5 MMT and ending stocks here were raised 0.5 MMT to just over 17 MMT.

"The EU is forecast to be the world’s largest (wheat) exporter and prices currently are the most competitive. Russia’s exports are projected at a record, while Ukraine’s exports are its second highest. Even though these countries are exporting large amounts of wheat, they are still expected to have a surplus, which will continue to pressure prices," they said.

In other news, the HGCA said that "fears around winter crop condition in parts of Russia and Ukraine look to be subsiding for now as forecasters project less harsh temperatures and greater snow cover in the coming days."