EU Wheat Little Changed On The Week, Rapeseed Falls

25/10/13 -- EU grains closed mixed but mostly lower, with the euro rising to a 2-year high against the dollar capping upside potential. The pace of EU exports has dipped off in the past couple of weeks if the volume of export licenses granted by Brussels is anything to go by. Nevertheless they are still well ahead of last year, and the trade feels that exports will pick up again in the new year once cheaper sellers stocks dwindle.

There's also talk that the rainy weather in Russia and Kazakhstan that slowed harvesting may also have caused there to be a much higher proportion of the wheat there as being only suitable for feeding this year.

Nov 13 London wheat closed GBP0.10/tonne firmer at GBP165.75/tonne, whilst Jan 14 was down GBP0.40/tonne at GBP167.00/tonne. Nov 13 Paris milling wheat settled up EUR0.25/tonne to close at EUR205.00/tonne. Nov 13 Paris rapeseed was down EUR5.50/tonne at EUR370.00/tonne.

For the week, Nov 13 London wheat was GBP0.85/tonne lower, Nov 13 Paris wheat rose EUR0.50/tonne and Nov 13 Paris rapeseed fell EUR7.00/tonne. Whilst soybean prices have been flat to slightly lower across the past month, rapeseed prices have been rising and maybe getting a little ahead of themselves considering that we are looking at a record global crop in 2013/14. There's also been some talk lately of crushers on the continent switching into soybeans and sunflowers, both of which are mid-harvest and offer more attractive crushing margins.

The Russian harvest is finally starting to wind down at 91.3% done, producing a bunker weight grain crop of 89.2 MMT to date. That includes 53.3 MMT of wheat off 95.4% of the planned area, along with 15.8 MMT of barley (off 91.3% of plan), 5.5 MMT of corn (42.9%) and 6.9 MMT of sunflower (57.3%). Winter plantings in Russia have advanced to 13.4 million hectares, 82% of the original target.

Russia's wheat exports are expected to fall from 2.4 MMT in September to around 2 MMT this month, and probably decline further towards the end of the year.

For now though things are looking better in Ukraine, the Stats Office said that the country had exported 1.9 MMT of wheat in September, a 37% rise versus August and 50% more than in September 2012. Egypt was the top destination taking 23% of that total. The Ukraine Weather Centre said that the combination of heavy rain in September, followed by a drier and warmer October, has been an "extremely favourable factor for vegetation" and that winter crops were looking good ahead of dormancy. Ukraine agronomist Mike Lee said that it was looking increasingly likely that winter wheat plantings would be able to match last year's levels after all.

The leading French grain port of Rouen has had an "average" week, shipping 150 TMT of grains, including 71 TMT of soft wheat to Algeria.

FranceAgriMer reported that winter wheat crops there had advanced from 39% planted last week to 54% sown this time round, far higher than last year's 31%. Emergence is 34% versus only 13% this time in 2012. Winter barley is 77% sown versus 48% a year ago. Emergence is 56% compared to only 23% in 2012. The corn harvest is only making slow progress though, moving from 6% cut to 16% done, well behind last year's pace when 43% of the crop was already in the bin.

The Spanish Ministry raised their estimates for this year's grain production. Soft wheat output was increased from 6.4 MMT previously to 6.7 MMT, a 43% rise on last year. They increased their durum wheat estimated only slightly from 903 TMT to 905 TMT, although that's more than double their output in 2012. Barley production is now seen at 10 MMT versus 9.4 MMT previously and up by two thirds on 6 MMT a year ago. The Spanish corn crop is now forecast at 4.8 MMT versus 4.7 MMT previously and 4.2 MMT last year.

The wheat harvest is underway in Australia, there's talk of bumper production in Western Australia state, the country's main export hub, although there could be some problems in the east. They've also now just about begun the wheat harvest in Argentina.