EU Grains Mostly Higher, With Euro Shaky On Greek Nervousness

22/06/15 -- EU grains closed mostly higher, with the euro "shaky" ahead of what could be a pivotal week for Greece and the Eurozone. The Greeks need to repay the IMF $1.6 billion by the end of the month, money that they clearly haven't got. EU leaders are however talking more optimistically today that an eleventh hour deal with the country's creditors could still be struck. Either way, the cost to Europe is likely to be large, keeping the euro under pressure for some time to come.

Jul 15 London wheat ended unchanged at GBP111.00/tonne, Sep 15 Paris wheat was up EUR3.00/tonne at EUR181.50/tonne, Aug 15 Paris corn was up EUR1.00/tonne at EUR162.75/tonne, whilst Aug 15 Paris rapeseed firmed EUR2.00tonne to close at EUR381.25/tonne.

The latter was within touching distance of the highest close for a front month since April 2014. Canadian canola futures hit a one year front month high today, and the benchmark Nov 15 contract hit its highest levels in 14 months as a combination of dryness and a mid-May frost threaten to cut production there this year.

The EU Commission's MARS unit cut their forecasts for EU soft wheat, barley and rapeseed yields from a month ago, but left corn potential unchanged in their latest monthly crop report today.

"Crop yield forecasts for most winter cereals at EU-28 level have been lowered compared to last month’s forecast due suboptimal weather conditions," they said.

They now peg this year's EU soft wheat average yield at 5.85 MT/ha, down 4.7% on a year ago and down from the 5.93 MT/ha predicted a month ago. Barley yields were pegged at 4.65 MT/ha compared to 4.75 MT/ha last month and 5.1% below 4.90 MT/ha in 2014. Rapeseed yields were reduced to 3.28 MT/ha from 3.42 MT/ha in May and are now 9.4% below year ago levels of 3.62 MT/ha.

Changes to yield potential in France were only minimal, with wheat unchanged, barley and corn up a bit and rapeseed down only slightly.

Germany was a different story however, with wheat yields now seen at 7.77 MT/ha compared to 8.04 MT/ha a month ago and now 9.9% lower year-on-year. Rapeseed yields were also cut significantly to 3.96 MT/ha versus 4.40 MT/ha in May and down 11.6% on an average of 4.48 MT/ha in 2014.

"Scarce rainfall over large parts of Germany gives reason to worry. Soil moisture has reached very low values and without rain in the coming days a clear yield reduction of winter crops is unavoidable," they said.

In the UK, wheat yields were estimated unchanged at 8.14 MT/ha, down 5.1% compared to last year. Barley yields were trimmed slightly to 6.12 MT/ha, down 4.4% versus 2014, and rapeseed yields were also cut back a little to 3.53 MT/ha, a 4.9% reduction on a year ago.

"Relatively cool weather slowed down crop development somewhat but indicators remain positive. More rain is needed in south-eastern England to sustain good growth over the coming weeks," they said.

In other news, APK Inform said that Ukraine's seaports had exported an impressive 575.8 TMT of grains last week, up from 402.5 TMT the previous week. Once again corn accounted for the vast majority of that total at 527.1 TMT.

Russian exports via seaports were also up week-on-week, albeit at not quite such stellar levels. They shipped out 336.6 TMT of grains lat week, with wheat accounting for the lion's share at 278.1 TMT.

Bulgaria's Ag Ministry said that the country's 2015 wheat crop would come in at around 4.3-4.5 MMT compared to 4.9 MMT last year.