EU Wheat Sets New 4-Year Lows

Posted by Nogger - a legend in his own mind at 08:53 | Categorized as

29/07/14 -- EU wheat futures slumped to fresh 4-year lows on harvest pressure and rising production estimates coming out of Russia and Ukraine.

The day ended with new crop Nov 14 London wheat closing GBP1.55/tonne lower at GBP123.95/tonne, Nov 14 Paris wheat was EUR3.25/tonne weaker at EUR175.00/tonne, Aug 14 Paris corn was up EUR2.25/tonne to EUR162.00/tonne (although new crop months were mostly lower) and Aug 14 Paris rapeseed fell EUR0.50/tonne to EUR319.50/tonne.

UkrAgroConsult raised their forecast for the Ukraine 2014 grain crop to 57.4 MMT, a 4% increase on their previous estimate. The increase was largely due to the better than anticipated yields being achieved this year, they said.

They now see 2014/15 Ukraine grain exports at 31.7 MMT, a 2 MMT hike on their previous estimate. That includes wheat exports of 9.5 MMT versus a previous estimate of 9.0 MMT and up compared to 2013/14 exports of 9.2 MMT.

The Ukraine analyst also raised their outlook on corn production and exports in 2014/15 to identical levels to the records set in 2013/14.

The Ukraine Ministry said that the early grains harvest, which excludes corn, had been completed on 7.1 million ha, producing a crop of 23.6 MMT to date. That total includes 16.3 MMT of wheat and 6.8 MMT of barley. Yields thus far are averaging 3.33 MT/ha, up nearly 10% on a year ago.

IKAR yesterday estimated Russia’s 2014 wheat crop at 57.5 MMT versus a previous estimate of 56.3 MMT.

The Russian Ministry said that this year's grain harvest was 27.2% complete at 43.6 MMT, with yields averaging 3.44 MT/ha, a sharp rise of more than 23% on a year ago. The total includes 35.9 MMT of wheat off 38.9% of the planned area, with yields at 3.64 MT/ha, a 20% increase on this time last year. Barley adds a further 3.8 MMT, with yields at 3.05 MT/ha, up 33% on a year ago.

Morocco are said to be planning to lower their import duty on wheat from Sept 1, in a moved that seems to be linked to quality concerns over French wheat which could allow more grain into the country from the Black Sea.

Egypt announced a late tender for wheat for September shipment with the results expected tomorrow. Russia, Romania and Ukraine wheat all scored successes in the last GASC tender.

China is said to be buying large volumes of cheap foreign barley for import, to supplement it's virtual embargo on US DDGs. They've already taken more French barley this month than they did in the whole of 2013/14.