EU Grains Mostly Lower, Talk Of Potential Crop Damage By Flooding Played Down

24/02/14 -- EU grains were mostly a little lower, and now appear to be trading sideways until we have a clearer picture of what crop production will be like in Europe, the US and FSU later in the spring.

Mar 14 London wheat ended GBP0.10/tonne lower at GBP155.50/tonne, and with new crop Nov 14 GBP1.35/tonne weaker at GBP147.55/tonne. Mar 14 Paris milling wheat was EUR0.25/tonne higher at EUR198.50/tonne, Mar 14 Paris corn was down EUR0.75/tonne to EUR173.25/tonne and May 14 Paris rapeseed fell EUR2.00/tonne to EUR390.00/tonne having earlier traded at the highest level for a front month since last July.

The EU Commission's MARS until said that "the impacts of the flooding and waterlogged conditions on crop and pasture production are difficult to judge at this time." The UK and northern Italy are the worst affected areas, although parts of France, Spain and Portugal have seen similar condition but to a lesser extent, they said.

Overall though, they don't see huge problems for crop production, noting that in the UK it's grassland areas rather than arable land that is worst affected.

"At the national level (in the UK) the impacts on production are expected to be limited. In France, the negative impact of the rains is expected to be more localised. In the Iberian Peninsula, the excessive rains in the north-western areas may have hampered pasture development, whereas the effects on crops and restored water reservoirs are predominantly beneficial in the southern regions," they said.

MARS are expected to release their first EU-28 yield forecasts of the season next month.

In Russia, IKAR estimated the 2014 grain crop at 91 MMT - broadly similar to last year. ProZerno were more upbeat, estimating the 2014 Russian grain harvest at 98 MMT, saying that reduced winter sowings are being compensated for by much lower levels than normal of winterkill and better than average crop conditions. They said that at the end of December winter crop losses were only estimated at 3.5%. Around 8-9% would be considered normal, although losses have been known to run into double figures in some years.

They peg the 2014 Russian wheat crop at 55 MMT, with barley production at 18 MMT and a corn crop of 10.2 MMT.

They see Russian grain exports rising to 25-27 MMT in 2014/15 from 22 MMT this season, including 18-19 MMT of wheat, 4 MMT of barley and 3-3.5 MMT of corn. Exports this season currently stand at more than 17 MMT, including 13.2 MMT of wheat, and 2 MMT each of barley and corn, they said.

Meanwhile, for all the talk of Ukraine temporarily "shutting up shop" on the grain export front, APK Inform said that 704.5 MMT of grains was shipped out of Ukraine sea ports last week, up from 516.3 MMT a week previously. Maybe this was a sudden last minute dash for the door? The vast majority of last week's total was corn at 606.6 TMT, they said.

Ukraine's record 63 MMT grain production last year could realistically swell to 80-90 MMT within the next 10 years, ProZerno said.