EU Grains Under Pressure From Cheaper Black Sea Crops

26/07/13 -- EU grains ended the day mixed with maybe just a hint of pre-weekend consolidation going on after another week of prices gradually grinding lower.

On the day both Nov 13 and Jan 14 London wheat closed unchanged at GBP162.75/tonne and GBP164.10/tonne respectively whilst Nov 13 Paris wheat settled EUR0.75/tonne easier at EUR187.75/tonne. There's no consolidation in sight yet for Paris rapeseed however, with Aug 13 closing EUR5.25/tonne lower at EUR356.75/tonne.

For the week Nov 13 London wheat closed GBP4.75/tonne easier, whilst Nov 13 Paris wheat fell EUR6.50/tonne. Aug 13 Paris rapeseed slumped EUR22.75/tonne versus last Friday.

For a front month in Paris wheat this was a 19-month closing low, and for Paris rapeseed this was a 3-year low. For Nov 13 London wheat this was the lowest close on the weekly chart in almost a year.

Brussels issued 435 TMT of soft wheat export licensed this week (versus 300 TMT last week), talking the 2013/14 marketing year to date total to just over 1 MMT versus 613 TMT this time last year. Unusually, and for the second week running, the volume of barley export licenses issued outweighed those for wheat at 441 TMT bringing the 2013/14 YTD total to 888 TMT compared to 669 TMT a year ago.

Ukraine's ProAgro group said that the country will harvest 2.2 MMT of rapeseed this year, up 76% on last year. Imports will rise 75% to 2.1 MMT, they added. Most of that will come to Europe.

South Korea MFG bought 60 TMT of optional origin feed wheat for Nov shipment. The Philippines bought 100 TMT of optional origin (most likely from the Black Sea) feed wheat for Sep/Oct shipment.

The latter traded at USD260/tonne including freight, which is the equivalent of just under GBP170/tonne, probably equating back to an ex farm price of no more than GBP130/tonne, if that.

The Ukraine Ag Ministry said that as of July 25 Ukraine has harvested 25.33 MMT of grains on 8.67 million hectares, with an average yield of 2.92 MT/ha, 24% higher than a year ago. The winter barley harvest is 99% complete, with winter wheat at 86% done producing 18.55 MMT so far, suggesting final output of around 21 MMT which would be up by a third on last year.

The Russian grain harvest is ongoing at 33.0 MMT off 25% of the planned area. Yields are said to be up 23.7% versus this time a year ago at 2.87 MT/ha. The wheat harvest stands at 27.4 MMT, with yields up 24% at 3.08 MT/ha and the barley harvest at over 3 MMT with yields of 2.47 MT/ha, up 7.4%.

Germany's DBV said yesterday that winter barley yields there this season are highly variable, from up to 15% down on year ago levels to in some cases 20% higher. The recent warm and sunny weather at least means that moisture levels are low in the 12-15% region.

The German winter barley harvest could be over by the weekend, given the forecast for warm and dry conditions to continue through to Sunday, they added. They are forecasting a crop of 7.7 MMT, up 650 TMT on last year.

The French winter barley harvest is also nearing completion, making huge strides this past week advancing from 49% complete to 94% done, according to today's estimates from FranceAgriMer. Winter wheat harvesting is now 14% complete versus 3% a week ago and 20% this time last year.

French crop conditions are little changed, with soft wheat, winter barley and spring barley all declining one percentage point in the good/excellent category to 66%, 65% and 68% respectively. Corn good/excellent conditions were unchanged at 57%. Corn crop development is still severely lagging though, only 12% of the crop is pollinating versus 53% this time last year.