EU Grains Press Higher

23/10/13 -- EU grains closed firmer, with Nov 13 London wheat up GBP1.40/tonne to GBP166.00/tonne, Nov 13 Paris wheat EUR2.50/tonne higher at EUR207.50/tonne and Nov 13 Paris rapeseed EUR1.75/tonne steadier at EUR380.25/tonne.

The market continues to press higher, which is in line with the normal post-harvest seasonal tendency at this time of year.

The Russian grain harvest now stands at 88.5 MMT off 90.7% of the anticipated area. Wheat accounts for 53.1 MMT of that off 94.9% of plan, with yields averaging 2.33 MT/ha, up almost 25% on year ago levels of only 1.87 MT/ha. They've also harvested 15.7 MMT of barley off 90.9% of plan.

Russian winter grain plantings are now said to stand at 13.1 million hectares, or 79.9% of the originally planned 16.4 million ha. The Russian Ag Ministry have lowered their forecast for winter grain plantings now to 14.0 million ha.

Winter plantings in Ukraine have also advanced markedly in recent weeks, after persistent rains slowed progress to a crawl in late September/early October.

It seems that whilst improvement is being made in the Black Sea, there are still many concerns with how well the wheat will germinate given the late start.

Firmer wheat prices of course mean an increased incentive to plant more for 2014. The US winter wheat area is seen increasing almost 3% to 57.7 million acres in 2014. There's talk that the French wheat area could rise by 2-3%, with UK plantings up more like 23-24%. Barley at a GBP25-30/tonne discount here is hardly going to encourage anything different.

Winter wheat plantings in Germany are nearly complete, with sowings in the north of the country expected to be finalised in the next 7-10 days.

Strategie Grains forecast the UK wheat area at 2.02 million hectares, not quite the all time high reached on 2000, but very close to it and sharply up on the 1.63 million ha sown for the 2013 harvest. With barley prices disappointing, oat levels being even worse and the various problems associated with winter OSR last year, the French analysts could still prove to be a bit low yet on their forecast.

The Commonwealth Bank of Australia have cut their forecast for the wheat crop Down Under from 25.2 MMT to 23.6 MMT due to crop losses in the east.

Russia bought 27.4 TMT of intervention grain as it continues to replenish it's domestic stocks, at also bought almost 30 TMT yesterday.

Oil World estimated the EU-28 OSR crop at 21 MMT, an increase of almost 7% on last year. EU rapemeal values shot higher today on reports that mills here are switching to more profitable soybean/sunseed crushing. Nevertheless, Reuters reported that the EU has agreed to slap a huge import duty on biodiesel imports from Argentina and Indonesia (who account for 90% of EU biodiesel imports), which should in theory mean that Europe will produce more rapemeal.