EU Grains Narrowly Mixed At Noon

08/10/15 -- EU grains trade narrowly mixed ahead of tomorrow's all important USDA report.

At noon, Nov 15 London wheat was up GBP0.50/tonne at GBP115.00/tonne. In Paris, Nov 15 wheat was up EUR0.25/tonne at EUR178.50/tonne, Nov 15 corn was down EUR0.25/tonne to EUR165.50/tonne and Nov 15 rapeseed was EUR0.25/tonne higher at EUR376.75/tonne.

Ahead of the USDA news, the FAO today raised their forecast for the world wheat crop by 7 MMT to a new record 735 MMT, which is now 3 MMT higher than the USDA's September prediction. Global ending stocks were increased 4 MMT to 206 MMT, although that is well below the current 227 MMT predicted by the USDA.

"In the EU winter wheat planting has begun in northern regions under normal conditions and there is some concern over central regions due to dryness. In the Russian Federation, the spring wheat harvest is wrapping up under mostly favourable conditions and winter wheat planting continues under satisfactory conditions with the exception of the southern regions where conditions are dry," they said. In Ukraine "there is concern over southern and eastern regions due to dryness," they added.

MDA CropCast sound a bit more concerned over the FSU than the FAO. They said that dryness remains "widespread" over central and eastern Ukraine, south central Russia and the North Caucasus region of the country. stressing newly planted winter wheat. Very cold weather this week will further slow crop development and may even cause the closure of the wheat planting window in the region, they added. The last estimate seen from the Russian Ag Ministry had winter grains plantings approaching 80% complete.

In Europe, showers this week will ease dryness for winter wheat germination and establishment in eastern Germany and the Czech Republic, but dryness issues will persist in Poland, they said.

In Ukraine, Oil World say that winter rapeseed sowing is more or less over, with the optimum planting time now well passed. They see the Ukraine OSR area down 29% at 570k ha.

In Germany they forecast the OSR area for the 2016 harvest at 1.28 million ha, around unchanged from a year ago, but 8.6% below the recent average.

In the UK, the FWi report that OSR plantings for next year will decline around 10% to 580k ha - the fourth annual fall in area in a row. Growers are switching to varieties with better disease resistance too, they note.

Staying at home for a minute, the normally cautious NFU estimate wheat yields this year to have averaged a record 9.1 MT/ha, which is significantly higher than the latest HGCA figure of 8.5-8.7 MT/ha. They now see production this year at 16.68 MMT, a bit better than last year's total and the third highest on record, and only marginally behind the second largest 16.70 MMT set in 2000.

The Bank of England voted 8-1 to keep UK interest rates on hold at 0.5% it was confirmed today, sending sterling a little lower which buoyed London wheat a touch.

France said that they'd exported almost 750 TMT of soft wheat to non-EU destinations in August. Exports to similar homes in the first two months of the season are now 1.43 MMT, a 24% rise on a year ago, as they scour the world market for buyers. Algeria was the top home taking 485 TMT.

French barley exports outside the EU in Jul/Aug were 1.32 MMT, of which more than 95% went to China.