EU Grains Mostly Higher, Weak Euro Continues To Support French Market
23/06/15 -- EU grains closed mostly higher, with continued euro weakness on Greek nervousness helping support the French market. The one remaining old crop London wheat contract closed lower, but other months ended around GBP0.90/tonne firmer.
At the close Jul 15 London wheat was down GBP1.10/tonne at GBP109.90/tonne, Sep 15 Paris wheat was EUR3.00/tonne higher at EUR184.50/tonne, Aug 15 Paris corn was up EUR1.50/tonne at EUR164.25/tonne, whilst Aug 15 Paris rapeseed ended EUR0.25/tonne higher at EUR381.50/tonne.
The barley harvest is underway in Russia, Romania and Ukraine. Early yields are said to be "good" in the first two and "average" in the latter, according to Agritel.
The Russian Ag Ministry said that the country had harvested over 230 TMT of "grain" so far (assumed to be barley) and that average yields were up 18% on a year ago. Domestic barley prices in Russia are now under pressure.
The Russian Ministry picked up 33,345 MT of "grain" at their latest intervention purchase round, of which almost 30,000 MT was grade-3 milling wheat.
They're harvesting barley in France too, where the forecast is warm and dry for the next 14 days, with temperatures in Paris forecast to hit 29C on Friday. That should accelerate the early barley and rapeseed harvest, but may knock a bit more yield potential off winter wheat.
Reuters reported that Indian millers had bought around 500,000 MT of Australian milling wheat to blend in with their own lower grade domestic crop this year, and almost half of that wheat has already been shipped. They are said to potentially be in the market for a further similar volume, and may turn their attention now to French or Russian new crop when it becomes available shortly.
The Australian Bureau of Meteorology said that the developing El Niño is similar to the previous record event seen in 1997/98. Australian wheat yields were down 12.4% overall that year, with El Niño typically bringing drought to eastern states, although it can sometimes make conditions wetter than normal in Western Australia.
"While the strengthening El Niño is a concern for crops in eastern Australia, the yield outlook is by no means yet clear. The timing of any rainfall over the next few weeks will be critical for these crops," said the HGCA.
"Meanwhile, the outlook for crops in Western Australia is currently more positive, but again, rainfall at certain growth development stages will be vital for crops to optimise yields," they added.
Oil World said that the EU had imported 4 MMT of soybeans in March-May this year, a 21% increase on the same period in 2014. Brazil was the largest supplier (at 2.37 MMT) followed by Paraguay (with almost 1 MMT). The EU also imported 5,26 MMT of soymeal in the period, slightly less than the 5.32 MMT brought in the previous year.
China said that it had imported 367.7 TMT of wheat in May, a 63% increase versus May 2014. Australia (210.8 TMT) and Canada (110.7 TMT) were the largest suppliers. The country also imported 726.2 TMT of barley last month, up 9% on a year ago, with Australia (406.9 TMT) and France (252.3 TMT) the biggest sellers.
The US winter wheat harvest remains retarded at only 19% complete versus 31% done normally, hampered by heavy rains which are causing sprouting and disease issues, as well as delaying planting of second crop soybeans.
Serbia said that it expects a 2015 wheat harvest of 2.4 MMT this year, which is enough to cover their domestic needs and provide something for export.
Rabobank forecast French milling wheat prices on MATIF at around EUR180/tonne in Q4 of this year, a little below where the Dec 15 contract currently trades. Having begun the year at EUR200/tonne, French prices have steadily ground lower throughout the year, currently showing a loss of 8.6% this year so far.
London wheat prices meanwhile are down close to 18% from where they finished 2014, and Chicago wheat is down almost 15%, showing that this year's demise of the euro has helped support the French market relative to the others throughout 2015 so far. The euro is down 9.5% versus the pound and has lost 7.5% of it's value against the US dollar so far this year.
Midwest Rains: Too Much Of A Good Thing, Or Not?
23/06/15 -- Most of this report came in yesterday from my US weather chum, Gail Martell at Martell Crop Projections, with a few inserts from your truly. You can click the image to enlarge it.
Excessive rainfall has developed in the eastern Midwest causing widespread flooding. Soybeans especially are in jeopardy, because plants are smaller, due to later planting dates than corn. As of May 31st, only half of soybeans had sprouted and emerged whereas corn development was rather advanced with early planting and stronger growth.
Soybean prospects are worse than corn 67% good-excellent, 27% fair and 6% poor-very poor in the June 14th report. Corn was 73% good-excellent, 22% fair and 5% poor-very poor in last week’s report. Updated conditions will be released this afternoon from USDA, expected to show worsening conditions in both crops from continuing heavy rainfall. (They did, soybeans now 65% good to excellent and corn is down to 71% in the top two categories, although that's far from a disaster just yet).
Illinois soybeans on June 14th were rather favourable with 70% good-excellent. The new report is expected to show worsening conditions in the second leading soybean state. Iowa soybeans were 80% good-excellent with relatively drier conditions. (Illinois beans are down 10 percentage points G/E to 60%, and Iowa is still on 80% as of last night).
Rainfall has been excessively heavy in the Midwest, east of the Mississippi Valley in particular. Tropical storm Bill is responsible for the extreme wetness, making landfall in Texas last week, spreading a swath of heavy rainfall up through Oklahoma then eastward through Missouri, Illinois, Indiana and Ohio.
Corn and soybeans west of the Mississippi Valley were “less wet”, though above average rainfall developed most everywhere in the farm belt. A rash of strong thunderstorms was under way this morning in the Upper Midwest keeping the rainy weather pattern going.
Virtually the entire Midwest soybean growing area is expecting more rain. The heaviest amounts are predicted for northeast Iowa, southwest Wisconsin, northern Illinois and central Ohio. Localised flooding is expected from excessive rainfall in the upcoming week, 4-6 times normal in selected areas.
Midwest temperatures are expected be merely average this week, cooler than last week, due to frequent cloudiness and showers.
Extreme Wetness Linked to El Nino
The El Nino climate anomaly is to blame for extreme wetness. The El Nino signal is particularly strong this season, in fact, among the most intense on record. The Climate Prediction Centre claims El Nino chances would remain above 90% in the next several weeks.
The USDA forecast for 2015 soybean production is 3.850 billion bushels, down 119 million bushels from the record 3.969 billion bushels produced in 2013. This forecast seems reasonable, but only if Midwest field conditions improve with drier weather. Perhaps smaller plants have been washed out in the low-lying areas. The prime time for soybean yields is the pod filling stage in August.
Chicago Grains End Higher Across The Board
22/06/15 -- Soycomplex: Beans and meal closed with strong gains on US planting concerns ahead of tonight's latest crop progress report from the USDA. That put US soybean plantings at only 90% complete, up just 3 points on the week and behind the 95% done 5-year average. That was also at the low end of expectations and means that as of Sunday night US farmers still had almost 8.5 million acres of soybeans left to sow using the USDA's March planting intentions estimate of 84.635 million acres. Kansas is only 73% done versus 91% normally at this time, and Missouri is barely past halfway through at 51% sown compared to the 5-year average of 88% complete. Emergence was placed at 84% versus 87% on average. Good to excellent ratings were cut 2 points to 65% versus 72% this time a year ago. Weekly export inspections came in at 178,094 MT and now need to average 155,876 MT to hit the USDA's target for the season. Cumulative season to date inspections are 47.6 MMT, around 112% of the total for the same week in 2013/14. Canadian canola futures hit a one year high, and prices in Europe are less than 2 euros away from being at a 14 month high. Canadian canola exports for the season to date are up 0.3% on a year ago at 7.6 MMT. Their soybean exports are up 5.9% at 2.4 MMT. Jul 15 Soybeans closed at $9.89 1/2, up 18 cents; Nov 15 Soybeans closed at $9.59 1/4, up 19 1/2 cents; Jul 15 Soybean Meal closed at $333.60, up $10.50; Jul 15 Soybean Oil closed at 32.92, up 37 points.
Corn: The corn market closed around 5 to 6 cents higher. Short-covering ahead of tonight's crop progress report may have been a feature today. After the close the USDA cut US corn crop ratings two points to 71% good to excellent compared to 74% this time last year. Indiana, Kansas, Missouri and North Carolina have the worst conditions. Pennsylvania, Wisconsin and Iowa have the best. Weekly export inspections of over 1.1 MMT beat trade expectations and were a little above what's required to hit the USDA target for the season. China were said to have imported 400,000 MT of corn in May, but virtually none of it came from the US. Jan/May imports are now 1.78 MMT. Roach Ag Marketing estimated US 2015 corn plantings at 88.1 million acres compared with the USDA's March prediction of 89.199 million. The USDA are due to release their revised forecasts next Tuesday. Plantings in 2014 were 90.597 million acres. The EU Commission's MARS unit estimated corn yields in Europe this year at an average 7.22 MT/ha, unchanged on a month ago but 10.6% down versus 8.08 MT/ha in 2014. They raised their forecast for corn yields in Ukraine from 5.60 MT/ha a month ago to 6.13 MT/ha, where they said "all crops benefited from favourable thermal conditions while soil water contents are still high." APK Inform said that Ukraine seaports exported 575.8 TMT of grains in the past week, of which 91.5% (527.1 TMT) was corn. Russia's seaports exported 336.6 TMT of grains last week, but less than 12% of that (39.2 TMT) was corn. Jul 15 Corn closed at $3.60, up 6 3/4 cents; Dec 15 Corn closed at $3.73 1/2, up 4 3/4 cents.
Wheat: The wheat market closed with solid gains on all three exchanges. The USDA reported the 2015 US winter wheat harvest had advanced 8 percentage points on the week to 19% complete, well below 31% done for the 5 year average. Missouri is only 12% done compared to 44% normally, Kansas is at 8% versus 33% on average, Indiana is at 5% done versus 20% normally and Illinois is just 3% complete against 29% typically at this time. Winter wheat crop ratings fell 2 points in the good to excellent category to 41%, although that's still better than only 30% a year ago. Spring wheat rated good to excellent was up one point on a week ago to 72%, the same as this time last year. Spring wheat at the headed stage was placed at 23% versus 15% on average at this time. Weekly export inspections of 290,300 MT were not a surprise, but not very impressive either. Canada said that it had exported 15.0 MMT of wheat (excluding durum) so far this season, a 3.3% increase on a year ago. Durum wheat exports are up 8% at 4.3 MMT and barley shipments are 5.5% higher at 1.3 MMT. APK Inform reported Russian seaports had shipped out 336.6 TMT of grains last week, up from 280.5 TMT the previous week, of which wheat accounted for 278.1 TMT of last week's total. The Russian Ag Ministry said that the country had exported 29.63 MMT of grains so far this season, up 18% from a year ago. Wheat shipments are 15% higher at 21 MMT, barley exports are up more than 100% at 5.23 MMT. The EU Commission's MARS unit cut their estimate for EU soft wheat yields this year to 5.85 MT/ha from 5.93 MT/ha a month ago and down 4.7% on 6.14 MT/ha a year ago. German yields are seen almost 10% lower than a year ago at 7.77 MT/ha, but those in France are forecast slightly higher at 7.41 MT/ha. Jul 15 CBOT Wheat closed at $5.01 1/4, up 12 3/4 cents; Jul 15 KCBT Wheat closed at $5.12, up 8 3/4 cents; Jul 15 MGEX Wheat closed at $5.53, up 10 cents.
EU Grains Mostly Higher, With Euro Shaky On Greek Nervousness
22/06/15 -- EU grains closed mostly higher, with the euro "shaky" ahead of what could be a pivotal week for Greece and the Eurozone. The Greeks need to repay the IMF $1.6 billion by the end of the month, money that they clearly haven't got. EU leaders are however talking more optimistically today that an eleventh hour deal with the country's creditors could still be struck. Either way, the cost to Europe is likely to be large, keeping the euro under pressure for some time to come.
Jul 15 London wheat ended unchanged at GBP111.00/tonne, Sep 15 Paris wheat was up EUR3.00/tonne at EUR181.50/tonne, Aug 15 Paris corn was up EUR1.00/tonne at EUR162.75/tonne, whilst Aug 15 Paris rapeseed firmed EUR2.00tonne to close at EUR381.25/tonne.
The latter was within touching distance of the highest close for a front month since April 2014. Canadian canola futures hit a one year front month high today, and the benchmark Nov 15 contract hit its highest levels in 14 months as a combination of dryness and a mid-May frost threaten to cut production there this year.
The EU Commission's MARS unit cut their forecasts for EU soft wheat, barley and rapeseed yields from a month ago, but left corn potential unchanged in their latest monthly crop report today.
"Crop yield forecasts for most winter cereals at EU-28 level have been lowered compared to last month’s forecast due suboptimal weather conditions," they said.
They now peg this year's EU soft wheat average yield at 5.85 MT/ha, down 4.7% on a year ago and down from the 5.93 MT/ha predicted a month ago. Barley yields were pegged at 4.65 MT/ha compared to 4.75 MT/ha last month and 5.1% below 4.90 MT/ha in 2014. Rapeseed yields were reduced to 3.28 MT/ha from 3.42 MT/ha in May and are now 9.4% below year ago levels of 3.62 MT/ha.
Changes to yield potential in France were only minimal, with wheat unchanged, barley and corn up a bit and rapeseed down only slightly.
Germany was a different story however, with wheat yields now seen at 7.77 MT/ha compared to 8.04 MT/ha a month ago and now 9.9% lower year-on-year. Rapeseed yields were also cut significantly to 3.96 MT/ha versus 4.40 MT/ha in May and down 11.6% on an average of 4.48 MT/ha in 2014.
"Scarce rainfall over large parts of Germany gives reason to worry. Soil moisture has reached very low values and without rain in the coming days a clear yield reduction of winter crops is unavoidable," they said.
In the UK, wheat yields were estimated unchanged at 8.14 MT/ha, down 5.1% compared to last year. Barley yields were trimmed slightly to 6.12 MT/ha, down 4.4% versus 2014, and rapeseed yields were also cut back a little to 3.53 MT/ha, a 4.9% reduction on a year ago.
"Relatively cool weather slowed down crop development somewhat but indicators remain positive. More rain is needed in south-eastern England to sustain good growth over the coming weeks," they said.
In other news, APK Inform said that Ukraine's seaports had exported an impressive 575.8 TMT of grains last week, up from 402.5 TMT the previous week. Once again corn accounted for the vast majority of that total at 527.1 TMT.
Russian exports via seaports were also up week-on-week, albeit at not quite such stellar levels. They shipped out 336.6 TMT of grains lat week, with wheat accounting for the lion's share at 278.1 TMT.
Bulgaria's Ag Ministry said that the country's 2015 wheat crop would come in at around 4.3-4.5 MMT compared to 4.9 MMT last year.
Chicago Beans End Lower On The Day But Higher For The Week
19/06/15 -- Soycomplex: Beans closed lower on the day, but higher for the week. Informa today estimated the 2015 US soybean area at 86.7 million acres, down 400,000 acres from their previous forecast, but still more than 2 million more than the USDA projected back in March. The Argentine Ag Ministry added 1 MMT to their forecast for this year's soybean crop there, taking that now up to 61 MMT. That's also 200,000 MT above what the Buenos Aires Grain Exchange said yesterday and 1.5 MMT above the current USDA figure. The trade seems to be anticipating a drop in US soybean crop condition ratings in Monday's USDA report due to excessive recent rainfall. The forecast for the weekend is a bit more friendly, but large areas of the soybean belt are set to still receive above average rains in the next 15 days. More eastern states, from the Dakota's all the way south down to Texas, should be a bit drier than normal though. Planting progress will also be under scrutiny on Monday, with 13% or 11 million acres still to be sown as of last Sunday night. I guess that we might see progress up from 87% done to around 92% complete there. The latest Commitment of Traders report shows managed money reducing their net short position in beans for the week through to Tuesday night. Jul 15 Soybeans closed at $9.71 1/2, down 6 1/4 cents; Nov 15 Soybeans closed at $9.39 3/4, down 2 1/2 cents; Jul 15 Soybean Meal closed at $323.10, down $3.50; Jul 15 Soybean Oil closed at 32.55, up 30 points. On a front month basis beans gained 31 1/2 cents for the week, with meal $5.70 higher and oil down 59 points.
Corn: The corn market closed around 4-5 cents lower. Informa estimated US corn plantings at 88.78 million acres, which was up a little from 88.74 million in May, but below the USDA's 89.2 million forecast from March. The USDA revise their acreage numbers at the end of the month. "Rumours are rampant that the latest swath of moisture won’t be taken into consideration in the June 30 acreage report and therefore be missing potentially the greatest impact of the crop year," said Benson Quinn. The acreage survey was conducted Jun 1-10. The trade is thinking that the USDA might cut US corn ratings by around 2-3% in the good to excellent category on Monday. The latest Commitment of Traders Report shows managed money adding almost 30,000 contracts to their net short position in corn for the week through to Tuesday night. That's an increase of around 25% in a week. The trade seems largely fairly optimistic that US corn yields will ultimately turn out pretty well this year, despite the well advertised heavy moisture totals. Rain makes grain, as the old saying goes. FranceAgriMer reported that 85% of the French corn crop was in good to very good condition, up one point from a week ago. They said that 91% of the crop had 6-8 visible leaves versus 83% a week earlier and 84% a year ago. Indonesia were said to have bought around 50,000 MT of optional origin corn for August-October shipment in a tender at $190/tonne C&F. Ukraine said that it had now exported a record 33.73 MMT of grains this season, including 18.27 MMT of corn. Jul 15 Corn closed at $3.53 1/4, down 4 3/4 cents; Dec 15 Corn closed at $3.68 3/4, down 4 1/2 cents. For the week Jul 15 corn was 1/4 cent higher and Dec 15 was 3/4 of a cent lower.
Wheat: The wheat market closed with small gains on the day, but still with some sizable losses for the week. I guess we could call today's action consolidation from recent losses therefore. Informa estimated the US all wheat acreage at 56.1 million, up from their May estimate of 55.9 million and above the USDA intentions number of 55.3 million. Wheat growers on the Plains will welcome the drier than normal forecast that's on the cards for most across the next 14 days. Plains Grains in Oklahoma estimate that the winter wheat harvest in Texas and Oklahoma is 49% and 41% complete respectively. The USDA said 47% and 38% done as of Sunday night, and will update us on that on Monday. Agriculture and Agri-Food Canada estimated the wheat crop there at 29.7 MMT this year, down from a previous forecast of 30.1 MMT. Ukraine said that it's 2014/15 wheat exports now stand at 10.75 MMT, with a further 4.46 MMT of barley having also been shipped out. The Russian Deputy Prime Minister said that the government plan no changes to the new "floating" export tax on wheat which comes into force on Jul 1. He did add however that if the financial markets stabilise then this might change at some point later in the season. FranceAgriMer trimmed 2 percentage points off winter wheat crop conditions there, although things are still better than they were a year ago. Jul 15 CBOT Wheat closed at $4.88 1/2, up 1/2 cent; Jul 15 KCBT Wheat closed at $5.03 1/4, up 5 cents; Jul 15 MGEX Wheat closed at $5.43, up 3 1/4 cents. For the week, Chicago wheat lost 15 1/4 cents, with Kansas down 14 3/4 cents and the Minneapolis market losing 18 1/4 cents.
EU Grains Mostly Higher On The Day, But Lower For The Week
At the close Jul 15 London wheat was down GBP0.50/tonne at GBP111.00/tonne, although new crop Nov 15 was GBP1.00/tonne firmer at GBP122.50/tonne. Sep 15 Paris wheat was EUR0.25/tonne higher at EUR178.50/tonne, Aug 15 Paris corn was down EUR0.25/tonne at EUR161.75/tonne, whilst Aug 15 Paris rapeseed jumped EUR5.75/tonne to close at EUR379.25/tonne.
For the week, old crop London wheat suffered losses of GBP5.50/tonne, whilst new crop did a bit better, shedding GBP2.00/tonne over the course of the week. Paris wheat was down EUR1.75/tonne compared with last Friday, corn fell EUR1.50/tonne, whilst rapeseed finished the week EUR6.75/tonne higher than it began it.
Various analysts have reported reduced rapeseed production expectations around the globe recently, explaining the strength being displayed in that market. Europe, Canada, Australia and Ukraine are all expected to see production levels this year fall anywhere between 5-18% as plantings of the oilseed decline.
In Europe, rapeseed crops in Germany and France are suffering from dryness and production estimates are being downsized. Another problem in French rapeseed was noted this week, when a Thompson Reuters crop tour of the country said that they had been "consistently told by local agronomists that the flowering stage lasted only 50-75% as long as it should have" this year.
They found rapeseed yield potential around 10-15% lower this year, "At this point, the weather no longer matters in terms of yield formation for the vast majority of rapeseed in France, as now the crop will sit and wait for harvest to start mid-July, with the hopes that severe summer storms steer clear until then," they noted.
Germany's DRV meanwhile forecast the 2015 rapeseed crop there to fall 20% this year, albeit from a record crop in 2014, on a combination of a 6% drop in plantings and a 15% decline in potential yields.
The Thompson Reuters tour of France found that yield potential in wheat was also in decline, although they said that there was still a few more week's time for life-saving rains, should they arrive, to reverse that trend.
FranceAgriMer today cut the proportion of the French winter wheat crop rated good to very good by 2 percentage points to 85% - that included a 4 point decline in the top "very good" category to 27%. At the end of May 36% of the crop was rated as being in very good condition.
French winter barley rated good to very good was trimmed one point also to 85%, spring barley in the top two categories was cut from 86% to 82%, although the proportion of corn rated that high was increased one point from a week ago to 85%.
A small amount of winter barley has been cut in the Midi-Pyrenees and Acquitaine regions, they said. Spring barley is now 99% headed, and 91% of the French corn crop has 6-8 visible leaves versus 83% a week ago and 84% a year ago, they added.
Spring barley in Burgundy is in good shape “but in urgent need of water,” according to Evergrain International. They cut their forecast for French spring barley yields from 6.7 MT/ha to 6.6 MT/ha, but raised their view on English spring barley yields from 6.0 MT/ha to 6.1 MT/ha.
In Spain meanwhile, the driest and warmest May ever will cut this year's cereal crop to 13.28 MMT versus a 5-year average of 15.8 MMT, said Asaja. They said that this was "remarkably lower than expected". Soft wheat production will fall to 5.1 MMT, down 10.5% on last year, with barley output falling 12% to 6.1 MMT, they predicted.
The EU Commission's MARS unit is due to released revised EU yield estimates on Monday, which will be watched with interest.
Chicago Beans End Higher, But Wheat And Corn Prices Fall
18/06/15 -- Soycomplex: Beans closed higher for a third session in a row. Weekly export sales of 132,900 MT on old crop and 532,000 MT on new crop were supportive. Exports of 353,900 MT were up 45 percent from the previous week and 38 percent above the prior 4-week average, adding further to the friendly tone. So too did dollar weakness today. Cumulative season to date exports are now 47.22 MMT, with a further 3.18 MMT worth of outstanding sales taking total old crop commitments to 50.4 MMT. The USDA currently has 2014/15 exports at 48.3 MMT, so current net commitments are 104% of that forecast. Continued wetness associated with Tropical Depression Bill leans supportive for beans. A Bloomberg survey into trader/analyst sentiment found 20 bullish, 6 bearish and 3 neutral on bean prices. That's a marked change on a week ago when the results were 6 bullish, 10 bearish and 5 neutral. MDA CropCast estimated the world soybean crop in 2015/16 at 302.7 MMT, unchanged from a week ago and 1.2% lower than the current season. They made no adjustment to their US soybean production estimate, pegging this year's crop at 3.823 billion bushels, down 3.6% on last year's record. They see US yields this year averaging 45.8 bu/acre versus 48.1 bu/acre a year ago. Informa are due to release revised US acreage estimates tomorrow. The Buenos Aires Grain Exchange said that the Argentine soybean harvest advanced 1.9 percentage points this week to 98.5% complete. That means that Argentine growers have now already brought in 60.4 MMT of their projected record 60.8 MMT crop this year. Jul 15 Soybeans closed at $9.77 3/4, up 8 3/4 cents; Nov 15 Soybeans closed at $9.42 1/4, up 2 1/2 cents; Jul 15 Soybean Meal closed at $326.60, up $2.90; Jul 15 Soybean Oil closed at 32.25, down 60 points.
Corn: The corn market closed around a cent or two easier. For now the trade seems to think that the excessive wetness being seen in the US is more of a potential problem for beans than corn. Weekly export sales of 627,200 MT for delivery in 2014/15 were up 27 percent from the previous week and 3 percent above the prior 4-week average, and ahead of expectations for old crop sales of around only 200,000 MT. New crop sales of 200,400 MT were a bit disappointing however. Exports of over 1 MMT were respectable. The Argentine corn harvest is making only slow progress. The Buenos Aires Grain Exchange estimates it at 43.1% complete, up only 2.5 percentage points on the week. They held steady with their production estimate at 25 MMT, but said that the arrival of the first frosts will reduce grain moisture and speed up the harvest of later sown corn. Many of these later crops have yield potential above average, so final production could end up higher than the current 25 MMT forecast, they said. A Bloomberg survey into trader/analyst sentiment found 14 bullish, 8 bearish and 7 neutral on corn prices. A week ago it was 7 bullish, 10 bearish and 4 neutral. MDA CropCast trimmed 0.25 MMT off their world 2015/16 corn production forecast, pegging the global crop at 960.8 MMT. They were unchanged on US production at 13.8 billion bushels, down 4% on last year's record. They see US yields this year averaging 167.4 bu/acre, down 3.2% on 172.7 bu/acre a year ago. Informa are due out with their latest US acreage estimates tomorrow, they had corn plantings at 88.7 million acres versus the USDA’s 89.2 million last time. The USDA themselves are out at the end of the month. The US National Climatic Data Centre said that El Nino means that the water in the Pacific is about 3.6 degrees above normal in the eastern end of the basin, and that there is an 80 percent chance that it will persist through the first three months of 2016. Jul 15 Corn closed at $3.58, down 1 1/4 cents; Dec 15 Corn closed at $3.73 1/4, down 1 3/4 cents.
Wheat: The wheat market closed lower on all three exchanges. Weekly export sales of 315,700 MT were in line with fairly modest trade expectations. The Buenos Aires Grain Exchange reduced their forecast for Argentine wheat plantings from 4.1 million ha to 3.9 million, and said that sowing of that is now 34.7% complete. Dryness is an issue in some parts of the Argentine wheat belt, and growers are also falling out of love with the crop due to low prices and fickle on-off export quotas. An area of 3.9 million ha would be a drop of 11.4% on plantings of 4.4 million a year ago. Some analysts are suggesting that even that is too high and an area as low as 3.5 million ha could be on the cards this year. Rain is in the forecast for some of the drier areas of eastern Australia. MDA CropCast cut 1.13 MMT off their world wheat production estimate, taking that down to 710.7 MMT, a 1.2% decline on a year ago. They took 0.95 MMT off their European estimate, reduced the size of the US crop by 0.43 MMT, added 0.25 MMT to Ukraine and were unchanged on Russia. Japan bought 113 TMT of US, Canadian and Australian wheat in their regular weekly tender. Heavy rains on the US Plains continue to frustrate winter wheat harvest attempts and could be driving down quality and causing disease issues. A Bloomberg survey into trader/analyst sentiment found 14 bullish, 4 bearish and 11 neutral on wheat prices. A week ago it was 6 bullish, 9 bearish and 5 neutral. Russia said that they'd agreed to sell 160,000 MT of wheat to Nicaragua. Russia's Deputy Prime Minister, Arkady Dvorkovich, said that the country could export 25-27 MMT of grains in 2015/16 if the current government target for production of 100 MMT is met, however unlikely that might be. Jul 15 CBOT Wheat closed at $4.88, down 3 1/4 cents; Jul 15 KCBT Wheat closed at $4.98 1/4, down 7 1/4 cents; Jul 15 MGEX Wheat closed at $5.39 3/4, down 8 cents.
EU Grains Stumble Hindered By Firmer Sterling/Euro
At the close, Jul 15 London wheat was GBP1.50/tonne lower at GBP111.50/tonne, Sep 15 Paris was EUR0.25/tonne weaker at EUR178.25/tonne, Aug 15 Paris corn was down EUR1.00/tonne at EUR162.00/tonne, whilst Aug 15 Paris rapeseed had fallen EUR1.50/tonne to close at EUR373.50/tonne.
News that UK wages are up 2.7% this month, compared to only 2.3% higher the previous month and market expectations of only a 2.1% rise, are buoying the pound. The Bank of England has long since said that the timing of interest rates in the UK finally beginning to rise is closely linked to improved earnings being able to support the move.
With these apparently now rising much faster than inflation, and unemployment also falling, the forex market is starting to think that a UK interest rate rise might not be too far away.
The minutes of the latest MPC meeting on monetary policy show that two members of the committee were "finely balanced" on whether to leave UK rates on hold or start to raise them. There could be a few more now starting to waiver next month.
This news comes just after the US Federal Reserve trimmed US growth forecasts and signalled a shallower path for interest rate rises there in the year ahead. Up until now the market had been factoring in US interest rates to start rising sooner than those in the UK, but now it's starting to look like the opposite could in fact be true.
The dollar was lower against even the euro today, with the German Chancellor Angela Merkel saying that she is "still convinced" that a Greek debt deal is possible.
A firmer sterling and euro were therefore a bit bearish for the EU grain markets today.
Strategie Grains cut their forecast for EU soft wheat production by 1 MMT to 141.6 MMT, and lopped 300 TMT off their durum wheat estimate too, taking the EU all wheat crop to 149.3 MMT, which is now 1.4 MMT less than the USDA's most recent forecast. Dryness in France, Germany, Poland and Spain was the main reason for today's cuts.
MDA CropCast trimmed 1.13 MMT off their world wheat production estimate this year, coming out with a figure of 710.7 MMT, a modest 1.2% decline on last year. The continued excessive wetness in the US saw them knock 0.43 MMT of winter wheat production there. They now have the US all wheat crop at 59.5 MMT this year, which is nevertheless still more than 6% up on a year ago.
Ukraine's wheat crop was raised 0.25 MMT to 23.0 MMT, a 3.8% fall compared to last year. Russia's was left unchanged at 55.0 MMT, a 5.3% decline on a year ago. Russia's anticipated crop size keeps nudging higher, they were calling it at 53.9 MMT at the beginning of March. Other analysts now think it could come in as high as 59 MMT, which would be little changed on a year ago.
Rosstat said that Russia's Jun 1 grain stocks in the hands of "harvesting and processing organisations" were 14.6 MMT, up 3.1 MMT (or +26%) on a year previously. Wheat accounted for 5.23 MMT of that total, a near 28% rise compared to 12 months ago. Grain stocks held in other hands were 7.8 MMT, also 26% more than a year ago.
MDA CropCast pared back their forecasts for the EU corn and barley crops this year too. They now estimated corn production here at 61.7 MMT, down 0.25 MMT from a week ago and 9.3% below last year. Barley production was seen at 56.2 MMT, down 0.34 MMT from last week and 2.4% below last year's output.
The move is consistent with other analysts ideas, with the German farmers co-operative DRV yesterday reducing their forecasts for wheat, corn, barley and rapeseed production there this year on dryness, adding that further losses are feared if the current warm and dry conditions continue.
The combines are said to be rolling in southern Russia, and probably also are in Ukraine too, bringing in the first of the 2015 winter barley crop. Isolated parts of France are also said to be cutting barley.
