EU Wheat Gives Up Some Gains

19/05/15 -- EU wheat gave up some of yesterday's gains, as US futures turned lower despite ongoing concerns over rains pounding US winter wheat on the Southern Plains.

At the finish, May 15 London wheat was down GBP1.30/tonne at GBP110.05/tonne, Sep 15 Paris wheat ended EUR1.75/tonne lower at EUR178.25/tonne, Jun 15 Paris corn fell EUR0.50/tonne to EUR154.75/tonne whilst Aug 15 Paris rapeseed rose EUR2.00/tonne to close at EUR357.75/tonne.

The pound was under pressure on news that UK CPI inflation had slipped below zero for the first time on record. The euro however fared even worse on ideas that the ECB might be forced to increase QE in the near future.

FranceAgriMer raised their forecast for French soft wheat plantings to 5.17 million ha, up 3.3% from 5.01 million ha a year ago. That's now more or less in line with the French Ag Ministry's figure of 5.18 million ha, which is the largest since 1936.

FranceAgriMer estimated the French winter barley area at 1.28 million ha, up 4.3%, some of that increase came at the expense of spring barley plantings which were pegged 11% lower at 467k ha this year. That's an all barley area of 1.75 million ha versus an Ag Ministry figure of 1.71 million ha.

French corn plantings were estimated down 6.4% at 1.64 million ha by FranceAgriMer, a little lower than the Ministry's figure of 1.71 million. The former also put rapeseed sowings 1.9% lower this year at 1.48 million ha.

The German Stats Office meanwhile forecast winter wheat plantings there up 3% at 3.25 million ha, with the German winter barley area also up 3% at 1.27 million ha. Winter rapeseed plantings there are down 6.4% at 1.3 million ha, they added.

Germany's DRV meanwhile forecast the country's winter wheat crop at 27.78 MMT, up more than 1 MMT from a month ago due to "continued cool and rainy weather". German barley production was estimated down 5.4% at 10.94 MMT, with winter rapeseed output falling 16% to 5.23 MMT, and the 2015 German corn crop is seen 6.1% lower at 4.83 MMT.

Agritel forecast the Ukraine barley crop at 6.9 MMT, down almost 27% on 9.4 MMT a year ago, although above the USDA's recent 6.2 MMT prediction. They see OSR output there at 1.8 MMT, a more than 14% drop on a year ago and a little below the USDA's estimate of 2.0 MMT.

UkrAgroConsult estimated Ukraine's 2015 wheat crop at 22 MMT, up 1 MMT from previously on recent beneficial rains. That's now only 0.5 MMT below last year's production. Wheat exports in 2015/16 were pegged at 12 MMT, up from their previous forecast of 10.8 MMT. Exports this season currently stand at 10.2 MMT, and might reach close to 11 MMT by the end of the campaign.

Spring planting progress in Russia remains behind schedule, with 18.2 million ha sown so far, according to the Ag Ministry there. That's 58.6% of the government forecast and 2.3 million ha less than this time last year.

Russian spring wheat is 42.3% sown on 5.6 million ha (versus 6.7 million ha a year ago), spring barley is 73.6% sown on 6.0 million ha (7.0 million a year ago) and corn planting is 82.1% done on 2.3 million ha (versus 2.2 million a year ago), they say.

Agritel forecast the Russian 2015 barley crop at 16.4 MMT, a 12.8% decline on 18.8 MMT a year ago, and slightly below the USDA's 16.5 MMT estimate.