EU Grains Post Daily And Weekly Gains As French Crop Conditions Decline

05/06/15 -- EU grains closed generally higher on the day, and for the week. There's some concern that very warm temperatures in Spain, France, southern Germany and large parts of Poland might be causing some crop stress. Temperatures in Bordeaux rose above 35 C (or 95 F) yesterday, and are forecast to stay above normal for this time of year for at least the next week in much of France.

The Paris market probably also got support from news that Greece would not be making the first of four loan payments due this month to the IMF, deferring the EUR300 million due today until the end of the month. The euro was lower on the back of that news.

At the finish today Jul 15 London wheat was up GBP2.30/tonne at GBP116.55/tonne, and new crop Nov 15 rose GBP1.55/tonne to close at GBP127.30/tonne, having earlier risen above GBP128.00/tonne to post its highest trading level since mid-Apr.

In Paris, Sep 15 wheat closed EUR1.00/tonne higher at EUR184.50/tonne, Aug 15 Paris corn was up EUR2.50/tonne to EUR165.00/tonne and Aug 15 Paris rapeseed jumped EUR4.50/tonne to EUR376.50/tonne.

For the week that puts London wheat up GBP6.45/tonne, with Paris wheat gaining EUR8.50/tonne, corn adding EUR5.25/tonne and rapeseed advancing EUR10.75/tonne.

FranceAgriMer trimmed their crop condition estimates for French wheat, barley and corn today - although wheat and barley ratings are still well ahead of where they were this time last year.

They put the proportion of winter wheat rated as good to very good at 89%, down 2 points on a week ago but still 12 points better than this time last year. The proportion of the crop rated "very good" was cut from 36% to 33%.

It was a similar story for winter barley, with the crop now 88% good to very good, down a point on a week ago but 14 points above 12 months previously. That included rating 29% of the crop in the top category compared to 34% a week ago.

Spring barley was rated 91% good to very good versus 93% last week and 69% last year. Again the proportion of "very good" was trimmed from 26% last week to only 20% this time round. Corn rated good to very good was cut 2 points to 86%, which is now also 2 points behind this time last year.

Wheat yield potential in southwestern France is falling by 200 kg/ha per day because of the warm weather, an ODA analyst told Bloomberg, but said that crop losses should be lower in other parts of the country.

Nevertheless, ODA yesterday raised their forecast for French wheat yields this year to 7.7 MT/ha, a 2.9% increase on a year ago. Using the official Ag Ministry estimate of a soft wheat planted area of 5.18 million ha, that implies a French soft wheat crop of close to 40 MMT this year.

France exported a fraction under 2 MMT of soft wheat in April, according to customs data. That's down 4% compared to March, but still a respectable volume as the previous month was the highest in over a year. Jul/Apr shipments are now 16.1 MMT, similar to those of a year ago. The French Ministry currently predict full season exports of 18.26 MMT, a 4.75% decline year-on-year. French barley exports in April meanwhile jumped 150% to 725 TMT on strong demand from China who took 60% of that total.

Customs data shows a slow down in French exports this week, with the port of Rouen only handling 171,474 MT of grain cargoes, a 22% decline compared with the previous week. Soft wheat accounted for 123,410 MT of that total, with Algeria the leading home. Feed barley exports totalled 44,183 MT, with China once again the top destination.

Brussels said that they'd issued 481 TMT worth of EU soft wheat export licences this past week, taking the season to date total to 29.8 MMT, up 11.6% on 26.7 MMT this time a year ago. Barley export licences now stand at 8.5 MMT meanwhile, a 60% leap compared with 12 months ago.

Rapeseed prices have risen this week on reports of fairly widespread frost damage to Canadian canola last weekend. The Government of Saskatchewan yesterday reported 44% of this year's canola crop to be in good to excellent condition versus 87% this time a year ago. The proportion of the crop rated poor to very poor was 22% compared to just 1% this time last year. Dryness remains a serious issue.

Egypt have been quiet on the international tender front lately. They say that they've now bought over 5 MMT of wheat on the domestic market, and will probably finish up taking around 5.3 MMT, far more than the originally intended 3.7 MMT. The price they are paying is well above current world levels, hence grower eagerness to sell to the government.

Things have finally dried out a bit in Kazakhstan, allowing farmers there to get 12.35 million ha of spring grains sown, although that's only 84% of the government target and around 2 million ha less than this time last year.

Russian spring plantings are now officially approaching 95% complete, with wheat nearly 97% sown, according to their Ag Ministry. There's some talk of heat and dryness issues here too.