EU Grains Mostly Higher, French Wheat Yields -30%

08/08/16 -- EU grains began the week in mostly positive territory, with French woes hanging over the market.

The day ended with benchmark Nov 16 GBP0.20/tonne higher at GBP127.205/tonne. Sep 16 Paris wheat traded down EUR1.00/tonne at EUR165.505/tonne, Aug corn was EUR0.50/tonne higher at EUR165.50/tonne and Nov 16 Paris rapeseed was EUR3.25/tonne firmer at EUR369.50/tonne.

The French Ag Ministry on Friday joined the bulk of the private trade in now calling for a sub-30 MMT French soft wheat crop this year. The question now is how low will it (finally) go? 28-29 MMT seems to be the range that people are looking at versus 41 MMT a year ago.

The Ag Ministry themselves are calling for yields this year to only average 5.57 MT/ha, a near 30% drop on 7.93 MT/ha a year ago.

One of the big remaining questions now is how will the UK wheat crop shape up once the harvest gets going in earnest here?

Of course, if we end up with 13 MMT or 15 MMT shouldn't really matter in the overall scheme of things globally, but it will make for a hell of a difference psychologically.

There's a shortage of rapeseed looming too. Strategie Grains predict that the EU will need to import 3.3 MMT of the oilseed in 2016/17 (without telling us where it is going to come from), up 400 TMT from their previous estimate and 15% more than in 2014/15.

Ukraine will only be able to supply a maximum of 1 MMT of that, with their own harvest seemingly capped at 1.2 MMT after a dry autumn cut plantings there last year.

Their harvest is currently 91% done at 1.1 MMT. They've also cut 93% of their early grains, producing 24.4 MMT of wheat and 9.3 MMT of barley to date.

Russia is 31.5% harvested for a grain crop of over 56 MMT so far. The should be able to cover the bulk of France's wheat shortfall on their own this year.

As far as exports go, Ukraine seaports sipped out 372 TMT of wheat to various destinations last week, along with 375 TMT of barley mainly of China and Saudi Arabia and 7 TMT of corn for Lebanon.

Russian seaports shipped out 321 TMT of wheat last week to assorted Med desinations, Senegal and the Philippines, along with 65 TMT of barley.

Private reports suggest that another 2 panamax cargoes of Romanian wheat are heading for the French port of Dunkirk.