EU Grains Consolidate From Recent Heavy Losses
20/05/14 -- EU grains markets finished the day higher, in consolidation from the recent sharp correction. This was the first time London wheat had managed a higher close in 11 sessions, during which time it has fallen GBP16.75/tonne.
The day ended with May 14 London wheat closing GBP0.80/tonne firmer at GBP151.05/tonne, with new crop Nov 14 London wheat GBP1.15/tonne higher at GBP149.05/tonne and Nov 14 Paris wheat EUR2.50/tonne steadier at EUR199.75/tonne. Jun 14 Paris corn was up a euro at EUR177.00/tonne, whilst Aug 14 Paris rapeseed rose EUR0.75/tonne to EUR358.25/tonne.
The wheat market is desperate for something bullish to hang onto, maybe the Australian Bureau of Meteorology's announcement that an El Nino event this summer is 70% likely is enough. Barclays said that wheat has advanced by an average of 13% during 6 previous El Nino years going back to 1986. Certainly El Nino would normally wreak havoc on Australia's wheat crop. It would also however typically bring a relatively cool and wet summer to the US Midwest, as well as provide plenty of rain in South America. The latter could be beneficial to the wheat crop in Argentina and Brazil, depending on the exact timing of it's arrival.
Meanwhile crops in Europe look great, the recent warm and dry spell is set to give way to soaking rains by the end of the week, which should be ideal.
The German Stats Office said that winter grains there had been sown on 5.42 million hectares, including 3.154 million ha of wheat (versus 3.06 million the previous year) and 1.24 million ha of barley (versus 1.21 million). Spring grains, excluding corn, had been planted on 558k ha, versus 551k a year ago. German growers will also plant 510k ha of corn, up from 497k in 2013, they added.
Oil World estimated the EU-28 rapeseed crop at a record 21.9 MMT, up from 21.3 MMT in 2013. They forecast the EU-28 2014/15 crush at 23.5 MMT, versus 23.1 MMT this season. EU-28 rapeseed imports will fall from 3.6 MMT in 2013/14 to 2.9 MMT next season due to the higher domestic production levels, they said.
Russian spring wheat has been planted on 6.7 million hectares, 2.2 million more than this time last year, and 50.7% of the intended area, the Ag Ministry said. Russian growers have also planted 7.0 million ha of spring barley (79.8% of plan), along with 2.2 million ha of corn (85.8%), they added.
The word out of Russia is that crop conditions are currently similar to last year.
SovEcon estimated Russia’s 2014 grain crop at 90.0 MMT versus a previous estimate of 88.0 MMT and the 2013 crop of 92.4 MMT. They pegged Russia’s 2014/15 grain exports at 24.0 MMT versus a previous estimate of 22.0 MMT although still down slightlyfrom their 2013/14 estimate of 25.6 MMT. Wheat exports will account for 17.5 MMT of that versus a 2013/14 estimate of 18.3 MMT, they said.
The Ukraine Ag Ministry said as of May 19th the country had planted 90% of its spring grains crop
Lebanon bought 30,000 MT of Romania wheat for June shipment. Jordan bought 50,000 MT of optional origin barley for October shipment and is tendering for 150,000 MT of optional origin milling wheat for Sept-Nov shipment. Algeria is looking for 50,000 MT of optional origin barley for Jul-Aug shipment. Russian wheat was said to be the cheapest offer in an Iraqi tender for hard wheat for August shipment.
