French Grains Fall Quite Hard To Start The Week

29/08/16 -- EU grains closed lower to start the week. London wheat was closed for the August Bank Holiday and will play catch-up tomorrow.

Despite the lack of UK input, French grains fell quite hard as wheat in Chicago slumped below $4/bu to the lowest levels seen since 2006.

The day ended with Sep 16 Paris wheat down EUR4.50/tonne at EUR154.00/tonne, Nov 16 corn was down EUR2.25/tonne at EUR162.00/tonne and Nov 16 Paris rapeseed fell EUR3.00/tonne to EUR371.25/tonne.

FranceAgriMer said that the quality of the new crop French wheat can now be analysed, now that he harvest is over. Some 65% of the French crop has a protein level of over 12%, and only 6% has a protein level that falls below the minimum 11.5% required for export.

Some 79% of French wheat has a hagberg falling number of over 240 (95% last year), but that's still not too bad, so where's the problem?

Only 28% of it has a specific weight of 76kg/hl or more, opening the door for large-scale imports of better bushel weight grain for blending purposes.

Overall, as it stands, only 10% of the crop makes French #1 standard of 11.5% protein, 77 kg/hl and 240 hagberg.

Egypt muddied the waters again over the weekend by stating that all wheat imports must (again) meet an ergot inclusion level of zero. The last time they did this offers at their tenders dried up to virtually nothing as 0.05% is the accepted industry standard. We shall have to wait and see how things pan out from here. Rejections and demurrage are a very expensive risk that nobody wants to take.

The German Ag Ministry said that wheat production there this year will fall 7.5% to 24.6 MMT due to wet weather.

Iran said that their 2016 wheat crop had come in at 14 MMT versus only 11.5 MMT a year ago.

Ukraine seaports exported 552.7 TMT of grains last week, said APK Inform, down from 647.7 TMT a week previously. That total included 391.1 TMT of wheat, 150.9 TMT of barley and 10.7 TMT of corn.

Russian seaports exports fell to only 203.1 TMT from 406.8 TMT the previous week, they added. Wheat accounted for 200 TMT of that total.

Russian exports to date are up 0.6% on a year ago at 4.48 MMT (wheat 3.7 MMT; barley 712 TMT; corn 39 TMT). Ukraine exports are 3.95 MMT (wheat 1.74 MMT; barley 1.71 MMT; corn 478 TMT).