EU Grains Mostly Lower In Subdued Trade

25/08/14 -- Paris grains closed mixed, but mostly lower, in a relatively subdued session, with London markets closed for the Bank Holiday.

The day ended with Nov 14 Paris wheat ended EUR0.25/tonne lower at EUR173.50/tonne, Nov 14 Paris corn was down EUR0.75/tonne at EUR152.00/tonne, whilst Nov 14 Paris rapeseed was EUR3.25/tonne lower at EUR321.50/tonne.

Fresh news was relatively thin on the ground, and US grain markets were mostly in the red, save for the continued early strength displayed in the nearby soybean and meal contracts. Somebody suddenly pulled the plug on even that in late afternoon trade.

Cheap and cheerful Romania said that they'd harvested a record wheat and rapeseed crop this year, putting production of the former at 7.4 MMT and the latter at 1.1 MMT.

The EU Commission's MARS unit said that "the overall forecasted EU-28 cereal yield for 2014 remains favourable, at the level of last year and above the last five years’ average (+6.1%). Yield prospects for grain maize are excellent at the moment."

They forecast the EU-28 2014 soft wheat yield at 5.85 MT/ha, up from 5.8 MT/ha a month ago and 5.1% above the 5-year average. The EU-28 barley yield was estimated at 4.61 MT/ha versus 4.54 MT/ha last month and 2.7% above the 5-year average. Corn yields this year were now placed at 7.53 MT/ha versus 7.23 MT/ha in July and 11.1% ahead of the 5-year average.

"Large parts of Europe, from France to south-western Romania, experienced exceptionally high rainfall levels. Although this led to a slowing down and interruption of harvesting activities, the negative impact on winter and spring cereals was limited, with severe problems only occurring locally," they observed.

"Conditions for summer crops are good to excellent in most of Europe. Near-average temperatures and the humid weather have boosted the growth of summer crops, especially for maize," they added.

For the UK specifically they forecast 2014 wheat yields at 8.24 MT/ha, up from 8.13 MT/ha a month ago, 11.6% up on last year and 10% above the previous 5-year norm. Barley yields were estimated at 5.81 MT/ha, unchanged on last month and marginally down on 5.85 MT/ha a year ago, if a fraction above the 5-year average.

The average UK rapeseed yield this year was estimated at 3.81 MT/ha, also the same as last month, 28.1% up versus last year and 11.4% up compared to the preceding 5-year average.

Russia said that it had now harvested 71.5 MMT of grains off 52.3% of the planned area. That total includes 46.2 MMT of wheat off 53.8% of plan, with average yields up 18.5% at 3.39 MT/ha. They've also harvested 15.9 MMT of barley off 65% of the intended area.

In addition the first few thousand hectares of this year's corn crop have now been harvested. Early yields are up 22.3%, although this is only off less than 1% of the planned area.

Russia said that it had already exported 5.857 MMT of grains this season (Jul 1 - Aug 20), a 22.7% increase on this time a year ago. That total consists mostly of wheat (5.148 MMT), with a smaller volume of barley (633 TMT) and a bit of corn (51 TMT) and other crops.

The Russian Ag Min last week raised their forecast for 2014/15 total grain exports to 25-27 MMT.

Ukraine said that it had exported a little over 4 MMT of grains so far this season (to Aug 22), including just over 2 MMT of wheat, more than 1.5 MMT of barley and 373 TMT of corn.

Oil World raised it's forecast for world 2014/15 oilseed production from 505 MMT to 507.2 MMT, which is 3.7% up versus 2013/14. They see the global soybean crop at 306.7 MMT, and the world rapeseed crop at 68.7 MMT. Soybean consumption in 2014/15 was estimated at 290.2 MMT, with that of rapeseed outstripping production slightly at 69 MMT.

The diary for the week ahead doesn't contain anything that looks too exciting. The USDA will report on the latest US crop conditions and spring wheat harvest progress tonight. Thursday brings the usual weekly export sales report, and the IGC are out on Friday with their monthly report.

In outside news, the BBC report that Russia are to send another "aid" convoy into Ukraine within days. That could add a bit more unpredictability to the markets this week.