EU Grains Mostly Higher In Light Consolidation

Posted by Nogger - a legend in his own mind at 19:34 | Categorized as

04/06/14 -- EU grains closed mostly a little higher in what might best be called consolidation trade from recent heavy losses, as thing stand you wouldn't call it a sudden reversal of fortunes or a break in the overall downtrend however.

The day ended with Jul 14 London wheat up GBP1.00/tonne at GBP147.50/tonne and with new crop Nov 14 London wheat closing GBP0.95/tonne higher at GBP143.00/tonne. Nov 14 Paris wheat closed up EUR1.50/tonne at EUR191.25/tonne, Jun 14 Paris corn was down EUR3.00/tonne to EUR168.25/tonne (the lowest for a front month since last November) and Aug 14 Paris rapeseed was EUR1.00/tonne firmer at EUR346.00/tonne.

After hitting multi-month, if not multi-year lows yesterday, some sort of rebound might have been expected. There was maybe an element of "bargain hunting" today. Chicago wheat helped in overnight trade by posting modest gains, after having previously fallen for 10 consecutive sessions - said to be it's longest losing streak in 20 years.

The EU Commission raised its forecast for this year's EU-28 soft wheat crop by 1.6 MMT to 137.5 MMT, a 2.3% increase versus 2013.

Heavy rain in the southern US Plains is seen as being far too late to be of much use to yields, and possibly more damaging than anything else.

The Russian Deputy Ag Minister forecast the 2014 grain crop there at 96.8 MMT. That's below the recent Ag Minister's estimate of 100 MMT, but still a pretty high number, and one that is still above last year's output of 92.4 MMT.

The Russian Ministry said that spring wheat had been planted on 12.4 million ha (95% of plan), along with 8.3 million ha of barley (95%) and 2.5 million ha of corn (97%).

Sunflowers have been sown on 6.7 million ha (94%), as well as 1.4 million ha of soybeans (81%) and 900k ha of spring rapeseed (83%), they added.

In Kazakhstan, spring grain plantings are 90.5% complete on 13.57 million ha, the local Ag Ministry said.

Algeria are said to be shopping for 50,000 MT of optional origin milling wheat and a similar volume of barley for September shipment, having bought substantial volumes of both for August earlier in the week.

The Chinese Ag Ministry said that 25% of their winter wheat crop is already cut.

UK growers are far from enamoured with current ex-farm prices, which are now said to be close to or below the cost of production for some. Black Sea producers however remain almost forced sellers, and are undercutting the rest of the global market on new crop corn and wheat.

New crop corn FOB Ukraine is said to be offered at around $206-210/tonne (circa GBP123-125/tonne).