EU Grain Demise Continues

25/07/13 -- EU wheat closed lower once more on what looks like harvest pressure and seasonal developments. Yet again Paris rapeseed took another slaughtering, falling to the lowest levels for a nearby month since Aug 2010. It's a job to know where this will end, the Aug 13 rapeseed contract expires next week but this total capitulation isn't just confined to the nearby contract, thither months were also sharply lower.

Nov 13 London wheat ended the day GBP1.90/tonne lower at GBP162.25/tonne and with Jan 14 also closing down GBP1.90/tonne at GBP164.10/tonne. Nov 13 Paris wheat fell EUR1.75/tonne to close at EUR188.50/tonne. Friendless Aug Paris rapeseed ended EUR6.75/tonne easier at EUR362.00/tonne.

This market is virtually friendless, it's as simple as that. These were all the lowest closes for a front month since ages ago, let's just leave it at that.

The Black Sea countries generally have a big harvest and want to dump it onto the world market straight away - as was highlighted by another resounding success for Russian, Ukraine and Romanian wheat in yesterday's Egyptian tender. The average price paid there, including freight, was only around USD1.50/tonne more than the best offer on an FOB basis in France.

Algeria meanwhile were said to have paid around USD273-274/tonne C&F (around GBP178-179/tonne dockside) for November shipment milling wheat yesterday, which is well below the cost of French replacement.

Morocco announced today that they have just finished a 9.7 MMT harvest, up 90% from last year, including a record 5.1 MMT of soft wheat, 1.9 MMT of durum and 2.7 MMT of barley. Imports in 2013/14 are likely to be curtailed accordingly.

The Russian grain harvest is said to be done on almost 25% of the planned area, producing a grain crop of 32.7 MMT so far, with yields up 24% at 2.89 MT/ha. That includes 27.3 MMT of wheat and more than 3 MMT of barley.

The French wheat harvest is said to have progressed into the north of the country, although recent activity has been disrupted by heavy rains and hail in places.

The German winter barley harvest could be more or less done by the weekend. Yields are said to be averaging 6.4 MT/ha, although highly variable. Moisture levels are low at 12-15% due to the recent warm and sunny conditions.

The German Farmers Association say that whilst the winter wheat harvest is also now underway, recent weather conditions mean that there are some quality worries. The wet spring has led to plenty of shallow rooted crops which may not be coping well with the sudden very warm and dry conditions, they said.

Tunisia bought 75 TMT of feed barley at prices around USD260-264/tonne C&F for Aug/Oct shipment.

Syria are tendering for 200 TMT of milling wheat on a humanitarian basis, with payment said to be set to come from assets frozen in EU and Arab bank accounts.

ProAgro estimated Ukraine’s 2013 wheat crop at 20.7 MMT, up 31% versus 15.8 MMT a year ago. They have Ukraine’s 2013/14 wheat exports at 8.4 MMT, up 29% from a year ago.