EU Grains Mixed On The Day, But Post Large Monthly Losses

30/05/14 -- EU grains closed mixed, but mostly a little firmer in a modest attempt at consolidation following what has been a pretty torrid month for the sector. Chicago wheat has offered no support, subsequently closing lower again later this evening for a 16th negative finish out of the last 17 sessions and postig its largest monthly decline in almost three years.

The day ended with Jul 14 London wheat up GBP0.50/tonne at GBP147.00/tonne (a modest rise from yesterday's 29-month lowest close for a front month) and with new crop Nov 14 London wheat closing GBP0.60/tonne lower at GBP143.75/tonne. Nov 14 Paris wheat closed unchanged at EUR191.50/tonne, Jun 14 Paris corn was up EUR2.00/tonne to EUR173.50/tonne and Aug 14 Paris rapeseed was flat at EUR350.50/tonne.

For the week, Jul 14 London wheat lost GBP3.25/tonne and Nov 14 was GBP2.35/tonne lower. In Paris, Nov 14 wheat fell EUR3.75/tonne, Jun 14 corn was down EUR2.25/tonne and Aug 14 rapeseed slipped EUR7.75/tonne. For the month of May, on a front month basis, London wheat is down GBP21.45/tonne, or nearly 13%. Paris wheat is down EUR23.75/tonne, or 11%. Paris corn is EUR11.00/tonne, or 6% lower, and Paris rapeseed stands a loss of EUR65.50/tonne, or nearly 16%.

Concerns about heat and dryness in Russia are just enough to if not stop the rot, at least slow the rate at which it is spreading a little, for the time being. Confidence is growing however that Ukraine will come close to matching last year's record 63 MMT grain crop with a harvest of maybe 60 MMT or more. The head of Ukraine's state weather forecasting centre's agriculture department told Reuters that this year's harvest could actually exceed last year's production levels.

It should also be noted that despite a record large exporting campaign in 2013/14, Ukraine still has considerable volumes of old crop grain to carry into the new season.

The spectre of them being aggressive marketeers of cheap corn again for another season doesn't bode too well for demand for wheat here, especially with Europe expecting its own production at a 6-year high, and anticipating the largest corn crop since at least the 1990's.

Agritel said that old crop corn FOB Ukraine is offered around $240-242/tonne versus $250/tonne a week ago. New crop corn is around $210-215/tonne for a drop of $20/tonne on the month. The political crisis in the country has seen the value of the Ukraine hryvnia fall by 39% against the pound and by 37% versus the US dollar in the past four months of turmoil. The urge to turn crops into cash will be very strong the minute that the combines start rolling, and that day isn't very far away for barley, OSR and wheat at least.

Meanwhile crop development in France is bordering on jaw dropping when viewed in comparison to last year. FranceAgriMer today said that 93% of the French winter wheat crop is headed compared to only 31% a year ago at this time. Even the spring barley crop is 12% headed versus only 3% this time last year, with 99% of the crop at the 2-node stage compared to 37% a year ago.

The French corn crop is 99% sown, versus 87% this time last year. Lifting is 97% against 77% and 30% of the crop has at least 6-8 leaves visible versus only 4% a year ago.

FranceAgriMer left the winter wheat crop rated 75% good/very good compared to 67% a year ago. Winter barley conditions fell one point from last week to 71% good/very good, although that's still better than 66% a year ago. Spring barley is rated 70% in the top two categories, unchanged from a week ago but behind 77% a year ago. The corn crop is rated 88% good/very good versus 63% a year ago.

At home, the HGCA said that crops remain 7-10 days ahead of normal with typical wheat crops approaching ear emergence and oilseed rape at the end of pod set. Most crops are in good condition, although disease pressure is high in winter wheat and black-grass is a very visible problem.

"Oilseed rape crop development is more advanced than recent years, although similar to 2011," they added.

Chicago Wheat Stuck In Groundhog Day

29/05/14 -- Soycomplex: Beans closed marginally higher, but essentially with little change. "The US producer has stepped to the sidelines with little to no old crop left to market and too busy planting to add to new crop sales especially with market some 35-cents off last week’s high," said Benson Quinn Commodities. That pretty accurately sums things up, it may be that we need to get a final idea on plantings at the end of June, and take a step closer to the 2014 US soybean harvest being the record breaking bin-buster that many expect before we see too much downside. MDA CropCast actually trimmed their forecast for US soybean production this year to 97.2 MMT (although that's still a record and up 12% on last year) due to a small acreage reduction. Reports of Chinese Letter of Credit problems abound, yet they still imported a record 6.5 MMT of soybeans in April. The Chinese Ministry of Commerce said that May imports will total 5.94 MMT, with those in June tailing off to just over 4 MMT. Oil World forecast a record large European rapeseed crop of 21.9 MMT this year. World production will however fall from 69.9 MMT last year to 68.3 MMT, largely due to a return to more "normal" levels in Canada (down 2 MMT to 16 MMT), but also with a drop from 4 MMT to 3.5 MMT from Australia. The global rapeseed crush meanwhile will increase from 62.8 MMT to 66 MMT, they said. Argentine officials said that their April soybean crush was 3.893 MMT versus 2.103 MMT in March and compared to 3.586 MMT in April 2013. Trade expectations for tomorrow's weekly export sales report for beans are around zero on old crop and maybe around 500 TMT on new crop. Jul 14 Soybeans closed at $14.99, up 1 1/4 cents; Aug 14 Soybeans closed at $14.32 3/4, up 4 1/2 cents; Jul 14 Soybean Meal closed at $498.40, down $0.10; Jul 14 Soybean Oil closed at 39.41, down 22 points.

Corn: The corn market finished lower, with fund money selling an estimated 6,000 contracts on the day. Some are saying that equities have now turned tables on the grains, and money is coming out of the commodities sector to go back into stocks and shares. There was also a report on Reuters that the deadly pig virus that has been sweeping the US is proving harder to eradicate than anticipated, and that may be having a negative impact on feed demand. The weekly ethanol grind came in at 927,000 barrels/day, up marginally on a week ago, but below the level required to hit USDA targets. China reportedly sold around two thirds of the 3.5 MMT of corn that they put up for auction today. South Korea's NOFI bought 120,000 MT of optional origin corn for Dec shipment. South Korea's KFA seek 60,000 MT of optional origin corn for Dec shipment. Israel bought 108,000 MT of corn of optional origin for July-Sept shipment. The IGC increased their forecast for the world 2014/15 corn crop by 5 MMT from last month to 955 MMT. They also raised ending stocks by 9 MMT from last month to 172 MMT, which is 8 MMT more than in 2013/14. They increased production in Europe from 65.3 MMT to 65.8 MMT, but cut Ukraine from 26.8 MMT to 26.5 MMT. The 2014/15 US corn crop was estimated at 350 MMT, unchanged from previously and only down marginally on last year's 353.7 MMT. Trade estimates for the USDA weekly exports sales report due tomorrow are 450-850 TMT. Jul 14 Corn closed at $4.69 1/2, down 3 cents; Sep 14 Corn closed at $4.63 1/4, down 6 cents.

Wheat: I'm thinking of simply copying and pasting the same market report as yesterday, last week and the week before to see if anybody can spot the difference. "The wheat market closed lower across the three exchanges, after another attempt to rally ultimately came to nothing." There you go, that should do it. This was the 15th lower close in the last 16 for Chicago wheat. That bit is new by the way, well sort of, I just added a one to both numbers. The IGC cut 3 MMT off their world 2014/15 wheat production estimate to 694 MMT, although with consumption trimmed by a similar amount ending stocks were left unchanged at an ample 187 MMT. Argentina's 2014/15 wheat crop was raised 1 MMT to 12.9 MMT, and Europe's was tweaked higher from 144.8 MMT to 144.9 MMT. There were no changes for Russia (51 MMT) or Ukraine (20 MMT). China's 2014/15 wheat imports are seen falling to 3 MMT from 7.6 MMT this season, which is in line with other trade estimates. The Chinese government sold less than 5% of the 717 TMT of wheat it had up for auction. MDA CropCast also raised their forecast for the Argentine wheat crop in 2014/15 to 12.9 MMT on the back of acreage increases, that's up 26.5% on last year's crop. Algeria was confirmed as having bought 700,000 MT of new crop French wheat for August shipment. Japan bought 98,483 MT of food wheat for June-Aug shipment from the US and Canada in a routine tender, but the market remains concerned that anything other than traditional homes for US wheat are buying from either Europe, the Black Sea, Australia or even India. Trade estimates for tomorrow's weekly export sales report are in the region of 200-600 TMT. Jul 14 CBOT Wheat closed at $6.32 1/2, down 6 1/4 cents; Jul 14 KCBT Wheat closed at $7.30 1/2, down 5 1/2 cents; Jul 14 MGEX Wheat closed at $7.14 1/2, down 3 1/2 cents.

EU Grains MIxed, Bulls Best Hopes Lie With Russia (Again)

29/05/14 -- EU grains closed mixed, with the differential between old and new crop on London wheat narrowing to little more than GBP2.00/tonne.

The day ended with Jul 14 London wheat GBP0.75/tonne lower at GBP146.50/tonne, and with new crop Nov 14 GBP0.30/tonne higher at GBP144.35/tonne. Nov 14 Paris wheat closed EUR1.00/tonne lower at EUR191.50/tonne, Jun 14 Paris corn was up EUR0.50/tonne at EUR171.50/tonne and Aug 14 Paris rapeseed finished EUR0.50/tonne firmer at EUR350.50/tonne.

Pressure from the potentially large looming EU harvest remains, although there are just enough nerves around about Russia being hot and dry to take a little bit of pressure off, despite official reassurances that everything there is fine.

Oil World forecast the EU-28 rapeseed crop at an all-time high 21.9 MMT, up from a previous estimate of 21.4 MMT and versus 21.3 MMT last year.

The German crop will come in at 5.7 MMT, unchanged from last month and little different to 5.8 MMT last year. That's in line with Toepfer's estimate of 5.72 MMT from earlier in the week.

Oil World estimated the French OSR crop at 5.2 MMT versus 5.1 MMT previously and up 18% on last year's poor crop of 4.4 MMT. They see production in the UK at 2.5 MMT, up from 2.4 MMT last month and up almost 14% on last year's 2.2 MMT. The UK will continue to vie with Poland to claim to be Europe's third largest rapeseed producing nation. Output there is also forecast at 2.5 MMT, versus 2.4 MMT previously, but down on 2.8 MMT a year ago.

Brussels said that it had issued 530 TMT of soft wheat export licences this past week, taking the soon to end 2013/14 marketing year total to a record 26.4 MMT. Import licences for 254 TMT of corn were also granted, taking the seasonal total to 13.3 MMT.

Rusagrotrans said that Russia will export around 1.4 MMT of grains in May, dropping to 5-600 TMT in June as old crop stocks decline. That potentially puts Russia's 2013/14 season exports at 25 MMT.

The head of the Ukraine grain traders union forecast this year's harvest at 60-62 MMT, down only a little on last year's 63 MMT. If achieved hat would be far higher than was thought likely a few months ago. He also sees 2014/15 exports little changed from this year's 32 MMT at 30-32 MMT.

Origin Enterprises said that UK crops have excellent yield potential after "near-perfect growing conditions supported the accelerated development of winter and spring [crops]," according to Agrimoney.

The HGCA said yesterday that the will issue their May crop report which "will give insight into crop conditions as they head into the critical final development stages" in the next few days.

Algeria was said to have bought 700 TMT of new crop French wheat at prices significantly below current replacement levels yesterday, in trader anticipation of lower prices to come.

A possible upcoming drought and some serious crop damage in Russia is still the bulls' best hope, followed by El Nino related problems for Australian wheat later in the year. The former would probably be more likely to be a big market mover than the latter.

Will the bulls get what they want, will Russia come to the rescue again? The Russian Weather Centre said that June will begin hot and dry in the European part of the country. They, and other analysts, note though that the very wet autumn that they endured currently means that most areas still have enough moisture in the soil for crops to look "normal" compared to previous average years.

However, there's a 70% chance of higher than normal temperatures and no better than normal rains in the June-August period, they say.

Chicago Wheat Down For 14 Sessions In 15 As Export Competition Hots Up

28/05/14 -- Soycomplex: Beans closed higher, in what you might call "Turnaround Tuesday" trade, a day later than normal due to Monday's Memorial Day holiday. The USDA announced 110,000 MT of US beans sold to China for 2014/15 delivery. They also announced 172,000 MT of US meal sold to the Philippines for 2014/15 shipment. China's weekly soybean auction was well received, with them selling more than 80% of the 300 TMT on offer. Was that due to demand, or because of problems obtaining Letters of Credit to buy imported beans? It's hard to say. Nevertheless the market viewed the information as supportive. Rumour that these weekly auctions may soon cease was also seen as friendly. China’s northeast province of Heilongjiang estimated its soybean planted area at 2.0 million ha, down 10% from a year ago. The US weather seems to finally be co-operating. "Producers in the Midwest and South last week planted 26% of the 2014 soybean crop last week, boosting plantings to 59% complete. This was impressive progress, considering that farmers were also finishing up with corn planting, and in the South, cotton and rice. Increased warmth and sunshine encouraged strong progress," said Martell Crop Projections. Reuters reported that the first two shipments of Brazilian beans to sail to the US east coast had arrived, with more expected to follow. Two vessels of Brazilian beans have already arrived in the Gulf. Ukraine soybean planting is 96% complete, along with 97% of its sunflower crop. Jul 14 Soybeans closed at $14.97 3/4, up 9 cents; Aug 14 Soybeans closed at $14.28 1/4, up 9 1/2 cents; Jul 14 Soybean Meal closed at $498.50, up $4.30; Jul 14 Soybean Oil closed at 39.63, down 31 points.

Corn: The corn market closed a couple of cents firmer, having traded both sides. Again maybe this was minor consolidation from yesterday's losses. "Corn producers made excellent progress planting last week pushing US corn planting to 88% complete. Corn emergence at 60% was behind schedule, however, reflecting persistent cold spring weather. Corn development in spring of 2013 was seriously retarded but the national average yield still finished above trend. In 2009 corn emergence was among the slowest of the decade, but the national average yield was a record high 164.7 bushels per acre. Conversely the fastest corn planting on record in 2012 led to a severely depressed corn yield, 123.4 bushels per acre, the worst in 17 years," noted Martell Crop Projections. This suggests that early delays in corn development are not necessarily detrimental to the yield, they said. Argentina exported 1.62 MMT of corn in April, a sharp drop on 2.79 in April 2013, according to customs data. The top buyer was Algeria (656 TMT), followed by Egypt (273 TMT). That takes the Jan/Apr calendar year so far corn exports to 2.33 MMT, a 65% decline on a year previously. Ukraine said that it's 2014 corn crop is 96% planted on 4.74 million ha. The USDA attaché in Russia estimated the 2014 corn crop there at 11.5 MMT versus 11.6 MMT last year. This week's regular weekly ethanol production data from the US Energy Dept is delayed a day due to the Memorial Day holiday on Monday and will be released tomorrow. Last week's production came in at 925,000 barrels/day, up slightly on the previous week but below the level required to hit USDA targets. The regular weekly export sales report from the USDA is also deferred until Friday. Jul 14 Corn closed at $4.72 1/2, up 2 3/4 cents; Sep 14 Corn closed at $4.69 1/4, up 3 cents.

Wheat: The wheat market extended recent losses, and Chicago wheat has now fallen for 14 out of the last 15 sessions. The US wheat crop may be lower this year, but they are still looking to export almost half of it, and the competition for sales is hotting up. Impending big crops from large US wheat export competitors like Europe and the FSU is what is dragging the market lower. Scarcely a day goes by without cheap offers or business on new crop being reported by others. "The French sale of new crop wheat to Algeria at roughly $248 FOB was a fresh negative input that wasn’t really much of a surprise. Reports have them selling 700 TMT at prices below the replacement values, but I doubt the sale price will be under replacement when the vessels are to ship," said Benson Quinn's Brian Henry. Russia picked up a new crop sale to Indonesia this week. The Philippines are tendering for wheat of Black Sea, EU, Australian, and/or Indian origin for July/Aug shipment. Russia’s Ag Minister estimated Russia’s 2014/15 grain exports at 25.0 MMT versus a previous estimate of 22.0 MMT. The USDA attaché in Russia estimated the 2014/15 grain crop there at 92 MMT, similar to a year ago. The Ag Ministry are even higher at 100 MMT, although most view this as optimistic. Production estimates from other analysts are creeping higher, not lower, though. The USDA attaché has the 2014/15 Russian wheat crop at 52 MMT (unchanged from 2013/14) versus the Ministry's 54-55 MMT and with this year's barley crop barley crop estimated at 16.0 MMT versus 15.4 MMT in 2013/14. The attaché sees 2014/15 Russian grain exports at 24 MMT. Rapid Canadian planting progress is being reported now that the weather is starting to co-operate. US spring wheat was 74% planted as of Sunday, the USDA reported yesterday. Whilst that's behind the 5-year average pace of 82% done, it's better than the 65% that the trade was expecting. Jul 14 CBOT Wheat closed at $6.38 3/4, down 2 1/4 cents; Jul 14 KCBT Wheat closed at $7.36, down 2 1/4 cents; Jul 14 MGEX Wheat closed at $7.18, down 1/2 cent.

EU Grains Mostly Lower, Although London Wheat Posts A Few Rare Modest Gains

28/05/14 -- EU grains markets finished mostly lower on the day, on buoyant crop production and export prospects around much of the world. London wheat managed a rare mostly higher close however, aided by a slightly weaker pound.

The day ended with Jul 14 London wheat up GBP0.25/tonne at GBP147.25/tonne, and with new crop Nov 14 London wheat GBP0.05/tonne higher at GBP144.05/tonne. Nov 14 Paris wheat ended EUR0.50/tonne lower at EUR192.50/tonne, Jun 14 Paris corn slipped EUR2.25/tonne to EUR171.00/tonne, whilst Aug 14 Paris rapeseed fell EUR3.25/tonne to EUR350.00/tonne.

Following on from the Russian Ag Ministry's latest upward revision for 2014/15 grain production of 100 MMT, a 6-year high, they increased their forecast for next season's grain exports from 22 MMT to 25 MMT. That's very similar to this year's anticipated volume of 25-26 MMT, depending on who's estimate you want to go with, and likely to keep a lid on upside price potential if they are correct. This season's exports as of 14 May were 23.7 MMT.

The USDA attaché in Russia estimated the wheat crop there at 52 MMT this year, very similar to a year ago. The Russian Ag Ministry now has it at 53-55 MMT.

Toepfer forecast the EU-28 soft wheat crop this year at 139.15 MMT, up 2.3% on 136 MMT last year. They have UK production at 15.06 MMT, a 26.3% rise on 2013.

They are also forecasting better yields on both German wheat and rapeseed compared to average.

They have Romania's wheat crop at 8.26 MMT versus 7.99 MMT a year ago, and Bulgaria's production at 5.17 MMT compared to 5.06 MMT in 2013.

Ukraine said that corn planting there is done on 4.74 million hectares, or 96% of plan. Soybeans have also been sown on 1.61 million ha (96%) and sunflower on 4.41 million ha (97%).

The HGCA noted that "given the mild winter and favourable growing conditions for the 2014 crop so far, it is logical to start thinking about the prospect of an early harvest this year. However, history is littered with examples, 2007 and 2012 for instance, when crop potential looked good at the end of May – only to be let down by poor weather in the key June/July grain filling period."

They did however sagely observe that "the reality is that the UK weather events of the last four years have masked what a typical UK average yield looks like." I couldn't agree more.

The 2009/13 average wheat yield was only 7.48 MT/ha. The preceding 2004/08 average was 7.86 MT/ha, with a high of 8.30 MT/ha in 2008.

If we work on a 2014 harvested area estimate of 2 million ha, then given the 2009/13 average we will end up with a production figure of 14.96 MMT this year, the 2004/08 average will give us a crop of 15.72 MMT.

Personally, something closer to the latter seems more likely.

Chicago Markets Slump, China Holds The Key

27/05/14 -- Soycomplex: Beans finished sharply lower, on anticipated strong progress with US plantings this past week under good sowing conditions. Talk of China cancelling Brazilian soybean purchases added to the negative tone following the long weekend. Brazilian exporters are still said to be having problems with Letters of Credit out of China. The trend that's developed over the last few years of the usage of soybean cargoes as collateral to raise finance (frequently for all manner of business activities totally unrelated to agriculture) in China is surely a dangerous one, the eventual implosion of which is almost as inevitable as it is also likely to be catastrophic for prices. The sub-prime of soybeans if you like, but when will it happen tomorrow, next month, next year? As with the sub-prime collapse this situation has been around so long now that maybe the market is getting complacent about it. That could make the results of a collapse in Chinese demand even more spectacular. Recall that China is expected to account for two thirds of global trade in soybeans in 2014/15. Shanhai's JC Intelligence reported that soybean stocks at major Chinese ports are at 6.8 MMT, up from 4 MMT at the start of the year and close to the all-time high of 7 MMT. Argentina's record 2013/14 soybean crop is also said to be one of the lowest quality in at least 17 years, with average protein levels of 37.2%. Oil levels are also at historically low levels, just 21.6% after a largely wet and cloudy growing season. Argentine growers are said to be only 29% forward sold, partly due to the late harvest, but also as a hedge against inflation and currency devaluation. The USDA reported that US 2014 soybean plantings had jumped from 33% to 59% done in a week, that was in line with trade expectations of 55-60% complete. The 5-year average is 56% done, and plantings were only 41% complete this time last year. It's generally northern states that are behind schedule. Emergence was 25% against 27% on average and 12% a year ago. Dr Cordonnier has the US 2014 soybean yield estimated at 44.5 bu/acre, unchanged from his previous estimate. Weekly US soybean export inspections came in at 89,269 MT versus 175,814 MT last week. Jul 14 Soybeans closed at $14.88 3/4, down 26 3/4 cents; Aug 14 Soybeans closed at $14.18 3/4, down 26 3/4 cents; Jul 14 Soybean Meal closed at $494.20, down $8.40; Jul 14 Soybean Oil closed at 39.94, down 44 points.

Corn: The corn market ended around 6 to 8 cents lower. Good planting progress was also expected with the US 2014 crop in the past week, and so it proved. The USDA said that 88% of the crop was now in the ground, up from 73% a week ago. That's exactly in line with the 5-year average and 4 points ahead of this time a year ago. Again it's the cooler/wetter northern states, such as Wisconsin, Michigan and North Dakota that are notably behind. Crop emergence was pegged at 60%, up from 34% a week ago and versus the 5-year average of 64% and 49% a year ago. "Producers (in these states) may substitute short-cycle, lowering yielding, corn for the full-season varieties due to the late date. Planting soybeans is another alternative, as seeding may continue up to early June without a yield penalty," said Martell Crop Projections. "Abundant sunshine and summer-like warmth are predicted in the Midwest this week, ideal for advancing planting. Warm temperatures are expected to persist for at least another week in the Midwest, encouraging rapid germination and strong development in corn and soybeans. Highs would reach low-mid 80s F. Nights would continue cool with mid 50s- mid 60s F," they added. Dr Cordonnier has the 2014 US corn yield estimated at 162.0 bu/acre, unchanged from his previous estimate and up from 158.8 bu/acre a year ago. He also pegged the 2013/14 Brazilian corn crop at 74.5 MMT versus a previous estimate of 73.5 MMT. He kept Argentina unchanged at 24 MMT. FO Licht estimated the EU 2014/15 corn crop at 66.4 MMT versus last year's crop of 64.3 MMT. They forecast Hungary at 7.6 MMT versus 6.7 MMT a year ago, with Romania at 9.5 MMT versus last year's record 10.6 MMT. CEC estimated South Africa’s 2014/15 corn crop at 13.548 MMT versus a previous estimate of 13.029 MMT. IKAR said that Russian corn plantings are 93% complete on 2.4 million hectares. Ukraine estimated that growers there have planted 96% of this year's corn crop on 4.7 million hectares. Ukraine said that it had exported a record 19.673 MMT of corn so far this season. China are said to be preparing to auction up to 3.5 MMT of government owned corn stocks on Thursday. Weekly US export inspections were 1,160,147 MT, compared to 1,063,857 MT the week before. Jul 14 Corn closed at $4.69 3/4, down 8 1/4 cents; Sep 14 Corn closed at $4.66 1/4, down 9 1/4 cents.

Wheat: The market closed lower across the 3 exchanges, with Chicago wheat taking the biggest hit. Weekly export inspections of 507,888 MT were down from the 592,059 MT inspected the previous week. That takes the total inspected for export to 30.7 MMT versus a USDA estimate for the marketing year that finishes on May 31 of 31.5 MMT. The USDA reported winter wheat at 70% headed, up from 57% a week ago and in line with 69% for the 5-year average. Winter wheat rated good/excellent rose one point on last week to a still poor 30%. Spring wheat plantings made good progress, up from 49% a week ago to 74% done, but still behind the 5-year average of 82% complete. Emergence is 43% against 57% normally at this time. US wheat is still being priced out going forward, with Indonesia buying 125 TMT of Russian 12% milling wheat at around $290-295 C&F for mid Jul to mid Aug shipment. New crop 12.5% milling wheat is said to be buyable around $258-262 FOB the Black Sea. The Philippines are said to be tendering for 95,850 MT of feed wheat from the Black Sea, EU, Australia, and or India for July–August shipment. Safras e Mercado estimated the Brazilian 2014 wheat crop at 6.37 MMT versus 5.6 MMT a year ago. Russia's IKAR said that the spring wheat crop there was 71% planted on 9.3 million hectares, up from 6.6 million this time last year. The Kazakhstan Ag Ministry estimated their 2014 spring grain area at 15.9 million hectares, including 12.8 million ha of wheat. They said that spring crops were planted on 9.4 million ha so far. Egypt said that it has bought about 3.0 MMT of local wheat so far this season. Toepfer estimated the EU-28 2014 soft wheat crop at 139.15 MMT versus 136.0 MMT last year. Algeria are in the market for 50,000 MT of optional origin milling wheat for August shipment. France is their usual preferred supplier. Algeria are said to have imported 2.2 MMT of wheat in Q1 of 2014, up 28% from a year ago. The market has now come down a long way from the recent highs. "Wheat futures continue into oversold territory, which could trigger a modest recovery. However, momentum studies don’t offer much hope of the trade being able to sustain a rally and point to lower prices before finding support," said Benson Quinn Commodities. The US 2014 winter wheat harvest is now underway in Texas, which might add a bit more negative sentiment, even if yields prove not to be that great. The spectre of a large European and FSU crop waiting in the wings is also a bearish influence. Jul 14 CBOT Wheat closed at $6.41, down 11 1/2 cents; Jul 14 KCBT Wheat closed at $7.38 1/4, down 6 3/4 cents; Jul 14 MGEX Wheat closed at $7.18 1/2, down 7 cents.

London Wheat Sinks To 29-Month Low

27/05/14 -- EU grains closed mostly lower, with London wheat faring the worst, playing catch-up with some of the losses posted by the French market yesterday when the UK (and US) was closed.

The day ended with Jul 14 London wheat down GBP3.25/tonne at GBP147.00/tonne, a 29-month lowest close for a front month, and with new crop Nov 14 London wheat closing GBP2.10/tonne lower at GBP144.00/tonne. Nov 14 Paris wheat closed EUR0.25/tonne higher at EUR193.00/tonne, Jun 14 Paris corn was down EUR1.25/tonne to EUR173.25/tonne and Aug 14 Paris rapeseed fell EUR2.75/tonne to EUR353.25/tonne.

A generally improved weather outlook for Europe, the FSU and the US, plus the imminent arrival of the 2014 harvest (the combines are already rolling in Texas wheat areas, and barley will probably be getting cut in southern France and Ukraine within a matter of weeks) has taken us all the way back to where we started on new crop, prior to the Russian taking of Crimea and the spec buying that prompted.

Europe will probably bring in it's second largest wheat harvest in history, and it's biggest corn crop in at least 15 years in 2014, according to current estimates. Russia's grain harvest will be around last year's levels, maybe more if you believe their Ag Ministry's estimates, and Ukraine's crop won't be down by that much on last year by all accounts.

Crucially, Russia and Ukraine are expected to export similar volumes of grain to this year, whilst it's unlikely that European wheat will see as much demand as it did in 2013/14. On top of that, Europe will continue to import large quantities of corn, according to current forecasts.

The Ukraine Ag Ministry said that the country had exported a record 31.337 MMT of grains so far this season, including 16.673 MMT of corn and 8.981 MMT of wheat. There's a further 743 TMT already on vessels waiting to sail, or portside waiting to load, they added.

They also said that Ukraine farmers had already planted 7.6 million of an anticipated 2014 spring grain area of 8.1 million hectares. That includes 4.7 million ha of an expected corn area of 4.9 million ha. Plantings last year were 4.825 million ha.

Russia's IKAR said that large to medium sized farmers there had planted 9.3 million ha (71%) of the planned 13 million ha of spring wheat area, up from the 6.6 million ha sown this time a year ago. They've also planted 2.4 million ha of corn (93% of the planned 2.6 million), up from 2.2 million ha this time last year.

Russia's crops are currently reported to be in pretty good shape, with the forecast rains due across the next couple of weeks likely to be of benefit. Crops in Ukraine are looking good too, with the odd exception in the east.

Indonesia bought 125 TMT of new crop Russian 12% milling wheat in a tender, reportedly paying $290-295/tonne for it, including freight. That equates to around GBP172.50-175.50/tonne delivered.

Black Sea 12.5% milling wheat is quoted in the market at around $258-262/tonne FOB for Jul/Aug availability - the equivalent of around £153.50-156.00/tonne loaded at the port. New crop corn is said to be around $218-220/tonne FOB, which is only around the GBP130/tonne mark loaded at the port.

The German Stats Office said that they'd exported 12 MMT of grains in the first three quarters of the 2013/14 campaign (Jul/Mar), up from 10.2 MMT a year previously. Exports within the EU were down to 5.5 MMT from 6.5 MMT in that period, whist those to non-EU destinations were up to 6.4 MMT from 3.7 MMT a year ago, aided by good demand from Iran after EU sanctions against the latter were relaxed.

Toepfer raised their forecast for the German wheat crop in 2014 to 24.87 MMT, which is now almost 1 MMT higher than the USDA's forecast from earlier in the month, and also increased their outlook on rapeseed output to 5.72 MMT (USDA: 5.48 MMT).

Better weather in the US this past week means that growers there should have made big strides with their plantings of corn, soybeans and spring wheat when the USDA release their latest planting progress report this evening.

South Australian grain growers meanwhile say widespread rains there have fallen just in time, after crops were sown into dry soil.

Texas Wheat Harvest 2014 (Video)

27/05/14 -- Not quite the horror movie advertised:

Breaking: Sausage Department Suffers Damage

27/05/14 -- Scanning t'internet for news of what's going on around the world relating to the grain market is what I do. London wheat has today fallen to the lowest levels for a front month since Dec 2011.  A repeat of the Russian drought of 2010 seems to be about the best hope that growers have of arresting the current slump in prices. So it was with interest that I read this today, saying that heavy rains and hail have arrived in the key southern Russian region of Krasnodar. Maybe those wanting higher prices will now be praying for even heavier rain and even bigger hailstones?

It's been translated for me by Google, as you may be able to tell:

"According to experts Krasnodar meteorologist, yet May 19 21.00-22.00 MSK in Gazyrskom ri Viselkovsky district of Krasnodar region was observed, large hail, up to 20 mm, accompanied by rainfall, wind squalls up to 25-28 m / s. Due to bad weather the roof was damaged in school, broken slate, beams. There was a large number of broken branches, split and knocked down trees in the park, damaged the roof of the sausage department, fallen tree damaged a school bus, on the roof, the walls of the siding had numerous holes."

The poor old sausage department, dripping it was, although it doesn't say if the back doors also took any damage....

French Grains Fall Whilst US And UK Holiday

26/05/14 -- London and US markets may have been closed for the Spring Bank and Memorial Day holidays, but it was business as usual in Paris.

The day ended with Nov 14 Paris wheat closing EUR2.50/tonne lower at EUR192.75/tonne, Jun 14 Paris corn was down EUR1.25/tonne at EUR174.50/tonne and Aug 14 Paris rapeseed closing EUR2.50/tonne weaker at EUR356.00/tonne.

As you might imagine, fresh news was relatively lacking, and lower still seems to be the path of least resistance. The win for the pro-West "King Chocolate" Petro Poroshenko in Ukraine's weekend elections was seen as reassuring, even if it was expected.

Widespread rains across the UK and France late last week and over the weekend will spread east to Germany and Poland over the next few days, further improving crop prospects in Europe and taking us one step closer to the crop being "made".

FranceAgriMer flagged up improved French winter wheat and barley conditions on Friday, there could be further upgrades at the end of this week.

UK crop prospects continue to look very promising indeed.

Russia reported spring plantings well advanced compared with a year ago, with spring wheat almost 80% done, spring barley nearly 88% complete and 95% of the forecast corn acreage now in the ground.

SovEcon kept their forecast for the 2014 Russian grain crop unchanged at 90 MMT, despite the Ministry's assertion that production might rise to a 6-year high 100 MMT last week. Large parts of the country have been hot and dry of late, if this week's advertised rain fails to materialise then some of these more optimistic forecasts may have to be downgraded, IKAR said.

Both analysts though seem to agree that the situation is not critical yet. The GFS model has 2-3 times normal rainfall in the forecast for the key southern and western parts of Russia across the next 15 days. The CMC model has a similar volume of precipitation forecast, but spreading much further east into the Urals, Siberia and all of Kazakhstan. Both models still show temperatures higher than normal for the next fortnight though.

APK Inform said that Ukraine's grain exports via seaports were up 140% from the previous week to nearly 588 TMT for the week through to May 25. That total included over 371 TMT of corn and nearly 214 TMT of wheat.

Russia said that it had exported 1.13 MMT of grains in the period May 1-21, including 796 TMT of wheat and 274 TMT of corn. Exports for the marketing year to date now stand at 24.1 MMT, an increase of almost 62% versus the same period in 2012/13.

Algeria is tendering for 50 TMT of milling wheat for August delivery. Private Israeli buyers are tendering for 40 TMT of optional origin feed wheat and 108 TMT of US, South American, European or Black Sea corn.

India said that government stores will hold 70 MMT of grain stocks by early June versus the official minimum requirement of 32 MMT on July 1.