EU Grains Mixed, Slumping Pound Aids London Wheat

07/10/16 -- EU grains closed mixed on the day and for the week. London wheat got another shot in the arm from the pound falling to fresh multi-year lows.

At the close Nov 16 London wheat was up GBP1.20/tonne at GBP129.25/tonne, Dec 16 Paris wheat was EUR1.25/tonne lower to EUR157.00/tonne, Nov 16 Paris corn was EUR1.00/tonne easier at EUR158.50/tonne, Nov 16 Paris rapeseed was EUR0.25/tonne higher at EUR377.50/tonne.

For the week that puts London wheat GBP2.20/tonne firmer, with Paris wheat down EUR3.50/tonne, corn EUR1.75/tonne weaker and rapeseed up EUR1.75/tonne.

London wheat continues to benefit from falling sterling. The British currency is down 17% against the US dollar since the Brexit vote and has fallen by 14% versus the single currency in the same period. Nov 16 London wheat has appreciated 12% during this time, whereas Dec 16 Paris wheat is 4% lower.

Pundits and bank analysts are now lining up to predict parity being on the cards for GBP/USD and GBP/EUR before too long, which would seem to indicate that further London wheat appreciation is on the cards regardless of what the world market does.

UK wheat will also be deriving some benefit from the lower French crop, both in terms of production and quality, this year. French wheat exports in August were down to 913 TMT from 1.03 MMT in July, taking the season so far total to 2 MMT, a 20% decline year-on-year. French wheat imports meanwhile are 71% higher for the first 2 months of the new season.

FranceAgriMer today reported the French corn harvest at 10% complete as of Oct 3, up from 4% done the previous week and versus 18% this time last year. Crop conditions good to very good fell one point to 53%,

French winter wheat planting was reported at 6% complete versus 17% a year ago. Winter barley is 10% sown versus 27% a year ago. Dry weather remains a problem.

Russia said that they'd exported 10.4 MMT of grains Jul 1 to Oct 5, a 2.7% increase on this time last year. Wheat accounts for 8.6 MMT of that total, barley 1.3 MMT and corn 479 TMT.

The Russian 2016 harvest is officially 92% complete at 113.5 MMT in bunker weight. That includes 75.4 MMT of wheat (97.6%) and 19 MMT of barley (96.7%). The 2016 corn harvest is 30% complete at 4.6 MMT. Plantings for the 2017 harvest are said to be 76.5% done on 13.3 million ha.

Ukraine said that their 2016 corn harvest was also 30% complete at 6.88 MMT. Winter grains are 69% planted on 4.37 million ha including 4.0 million of wheat (65% of the government forecast). Winter OSR is now fully sown on 738k ha, some 142k more than a year ago.