Nogger's Blog

18/06/14 -- EU grains markets were higher across just about the entire board, in consolidation trade from recent losses. Few would say that the downtrend has been broken yet however. Harvest pressure still remains, and will only increase in the coming weeks. Yield potential meanwhile is looking good.

The day ended with Jul 14 London wheat up GBP0.80/tonne at GBP139.55/tonne, and with new crop Nov 14 London wheat GBP1.50/tonne higher at GBP137.70/tonne. Nov 14 Paris wheat ended EUR1.75/tonne firmer at EUR188.50/tonne, Aug 14 Paris corn was unchanged at EUR176.50/tonne, whilst Aug 14 Paris rapeseed increased EUR0.75/tonne to EUR347.50/tonne.

Ukraine said that they'd harvested over 308 TMT of early grains, a volume consisting almost entirely of winter barley, although also including a small amount of winter wheat. Early yields are said to be averaging 2.72 MT/ha versus 2.24 MT/ha this time last year. Rapeseed harvesting is also underway.

The Russian harvest has also begun in Krasnodar, Stavropol and Adygea in the south of the country. Elsewhere in Russia spring grain planting is 98% complete on 31.3 million ha. That area includes 2.7 million ha of corn, which is over 103% of the Ministry forecast.

The EU Commission's MARS unit forecast a generally positive outlook for European cereal yields this year.

"The yield outlook for soft wheat is 4.2% above the 5-year average, and is particularly good for Romania, Hungary, Bulgaria and the UK," they said. You will note that bumper yields out of 75% of those sellers is rarely good news for prices.

They also see the EU-28 corn yield up 7.3% on last year, and 6.0% above the 5-year average. Barley yields will be 6.1% down on last year, but also still above the 5-year average by 1.4%.

Specifically, they place the average UK wheat yield at 8.05 MT/ha, which is 9.1% above last year and 7.5% above the 5-year average. "In the main crop-producing regions of the eastern UK, the seasonal conditions thus far could be characterised as being close to optimal," they said.

UK barley yields were forecast at 5.86 MT/ha, a more modest 0.2% up on last year and 2.1% above the 5-year average. UK rapeseed yields were forecast at 3.76 MT/ha, up 26.2% versus last year and 9.8% above the 5-year average.

Elsewhere, French and German wheat yields were both seen a little over 3% above the 5-year average. Barley yields are forecast down 0.8% in France but up 4.1% in Germany compared to the 5-year average. For rapeseed they are seen up 1.4% and 6.5% respectively versus the previous 5-year average.

In Ukraine, MARS forecast wheat yields down a modest 2.8% compared to last year, but up 7.1% compared the the preceding 5-year average. Barley yields are estimated to be up 4.7% and 8.9% respectively. Corn yields are forecast down 10.47% compared to last year's record, but still up 3.13% against the 5-year average.

All of the forecasts for Ukraine showed significant increases compared to MARS' expectations from a month ago due to the fact that "May was particularly rainy."

Yields in Romania, a regular "pile it high and sell it cheap" seller, are forecast well above the 5-year average. Wheat yields were forecast 20.2% above the norm, with barley yields up 15.4%. Corn yields are seen up 14.4% and those for rapeseed up 17% versus the respective 5-year averages.