EU Grains Mixed On The Day, But Post Large Monthly Losses
30/05/14 -- EU grains closed mixed, but mostly a little firmer in a modest attempt at consolidation following what has been a pretty torrid month for the sector. Chicago wheat has offered no support, subsequently closing lower again later this evening for a 16th negative finish out of the last 17 sessions and postig its largest monthly decline in almost three years.
The day ended with Jul 14 London wheat up GBP0.50/tonne at GBP147.00/tonne (a modest rise from yesterday's 29-month lowest close for a front month) and with new crop Nov 14 London wheat closing GBP0.60/tonne lower at GBP143.75/tonne. Nov 14 Paris wheat closed unchanged at EUR191.50/tonne, Jun 14 Paris corn was up EUR2.00/tonne to EUR173.50/tonne and Aug 14 Paris rapeseed was flat at EUR350.50/tonne.
For the week, Jul 14 London wheat lost GBP3.25/tonne and Nov 14 was GBP2.35/tonne lower. In Paris, Nov 14 wheat fell EUR3.75/tonne, Jun 14 corn was down EUR2.25/tonne and Aug 14 rapeseed slipped EUR7.75/tonne. For the month of May, on a front month basis, London wheat is down GBP21.45/tonne, or nearly 13%. Paris wheat is down EUR23.75/tonne, or 11%. Paris corn is EUR11.00/tonne, or 6% lower, and Paris rapeseed stands a loss of EUR65.50/tonne, or nearly 16%.
Concerns about heat and dryness in Russia are just enough to if not stop the rot, at least slow the rate at which it is spreading a little, for the time being. Confidence is growing however that Ukraine will come close to matching last year's record 63 MMT grain crop with a harvest of maybe 60 MMT or more. The head of Ukraine's state weather forecasting centre's agriculture department told Reuters that this year's harvest could actually exceed last year's production levels.
It should also be noted that despite a record large exporting campaign in 2013/14, Ukraine still has considerable volumes of old crop grain to carry into the new season.
The spectre of them being aggressive marketeers of cheap corn again for another season doesn't bode too well for demand for wheat here, especially with Europe expecting its own production at a 6-year high, and anticipating the largest corn crop since at least the 1990's.
Agritel said that old crop corn FOB Ukraine is offered around $240-242/tonne versus $250/tonne a week ago. New crop corn is around $210-215/tonne for a drop of $20/tonne on the month. The political crisis in the country has seen the value of the Ukraine hryvnia fall by 39% against the pound and by 37% versus the US dollar in the past four months of turmoil. The urge to turn crops into cash will be very strong the minute that the combines start rolling, and that day isn't very far away for barley, OSR and wheat at least.
Meanwhile crop development in France is bordering on jaw dropping when viewed in comparison to last year. FranceAgriMer today said that 93% of the French winter wheat crop is headed compared to only 31% a year ago at this time. Even the spring barley crop is 12% headed versus only 3% this time last year, with 99% of the crop at the 2-node stage compared to 37% a year ago.
The French corn crop is 99% sown, versus 87% this time last year. Lifting is 97% against 77% and 30% of the crop has at least 6-8 leaves visible versus only 4% a year ago.
FranceAgriMer left the winter wheat crop rated 75% good/very good compared to 67% a year ago. Winter barley conditions fell one point from last week to 71% good/very good, although that's still better than 66% a year ago. Spring barley is rated 70% in the top two categories, unchanged from a week ago but behind 77% a year ago. The corn crop is rated 88% good/very good versus 63% a year ago.
At home, the HGCA said that crops remain 7-10 days ahead of normal with typical wheat crops approaching ear emergence and oilseed rape at the end of pod set. Most crops are in good condition, although disease pressure is high in winter wheat and black-grass is a very visible problem.
"Oilseed rape crop development is more advanced than recent years, although similar to 2011," they added.
