EU Grains Developing Sideways Trade
29/08/14 -- EU grains closed mostly lower on the day, and little changed for the week, with the trade starting to develop a sideways pattern.
The day ended with Nov 14 London wheat up five pence at GBP121.80/tonne, Nov 14 Paris wheat was EUR0.75/tonne lower at EUR174.25/tonne, Nov 14 Paris corn was down EUR0.50/tonne EUR151.75/tonne and Nov 14 Paris rapeseed was EUR4.75/tonne lower at EUR323.75/tonne.
For the week that puts London wheat 45 pence lower, Paris wheat 50 euro cents higher, and corn and rapeseed both one euro lower.
So, support at GBP120/tonne and EUR170/tonne in London and Paris wheat is still holding, at least for now. The next big test might come when the 2014 EU and corn harvest begins and when the weight of new crop corn offers out of the Black Sea comes around. The corn harvest is just getting going in Ukraine and Russia.
The best hope as far as significant upside potential goes is unfortunately in the hands of Vladimir Putin it would seem.
The world 2014 wheat and corn crops meanwhile keep getting bigger. The International Grains Council today raised their forecast for global wheat output this year by 11 MMT from last month to a 2013 record equalling 713 MMT. They also added 5 MMT to their corn production estimate, pegging this year's crop at 973 MMT.
The rise in wheat production from that forecast last month was largely due to a 5 MMT increase for Russia, where the crop is now seen at 60 MMT, up 15% on last year. There was also a 3.8 MMT hike for production in Europe, taking output this year to 150.8 MMT, a more than 5% rise compared to last year.
Significantly too, Europe's 2014 corn crop was also raised from 66.4 MMT to 67.8 MMT, a near 6% increase on a year ago.
Russia said that it had now harvested 73.8 MMT of grains so far this year off only 55% of the planned area. Yields are up 18.6% versus 12 months ago. Wheat accounts for 47.2 MMT of that total off 56% of the intended area, with barley adding a further 16.7 MMT.
At home, the HGCA said that the 2014 UK harvest was around 80% done, up from 66% complete a week ago. Wheat is around 75% harvested, with yields so far averaging 8.3-8.6 MT/ha. With a planted area of just under 2 million hectares this year, that potentially could take this year's crop close to the 17 MMT mark.
The warm and dry forecast for the week ahead should enable further good harvest progress to be made.
FranceAgriMer said that the French wheat harvest was just about complete at 99% done as of Monday, and that the 2014 spring barley harvest is now over. They left their estimate for corn crop conditions unchanged at 86% good to very good, up sharply from 55% this time last year.
