EU Grains Mixed, But Mostly A Little Higher
17/09/14 -- EU grains closed mixed, but mostly posted modest gains, hoping (but not with a huge degree of confidence) that the worst may finally be over, and ideas that the bulk of the harvest pressure is over and that EU grains are finally winning some good export business.
The day ended with Nov 14 London wheat up GBP1.15/tonne at GBP113.75/tonne, and Nov 14 Paris wheat closed EUR0.50/tonne lower to EUR161.50/tonne. Nov 14 Paris corn was up EUR1.25/tonne to EUR140.25/tonne and Nov 14 Paris rapeseed was EUR1.75/tonne higher at EUR325.75/tonne.
For London wheat there may well have been an element of profit-taking or short-covering ahead of tomorrow's Scottish independence referendum. A "yes" vote would potentially send the pound into a tailspin.
France managed a clean sweep in yesterday's Egyptian tender. Algeria bought 50 TMT of optional origin durum wheat for Jan shipment overnight. Tunisia are in the market for 92 TMT of optional origin wheat and 75 TMT of optional origin barley, both for Nov-Dec shipment. Turkey bought 200 TMT of milling wheat of unspecified origin for Sep/Oct shipment.
Russian wheat was also comfortably out-priced in yesterday's Egyptian tender.
Their harvest currently stands at 87.3 MMT off 71.2% of plan, with wheat accounting for 52.5 MMT of that total, along with 19.4 MMT of barley and 2.5 MMT of the early corn harvest (currently 18.5% complete).
Ukraine's harvest meanwhile is now 69% complete at 37.6 MMT, including 1.49 MMT of their early corn harvest (which is 8% complete). They've also harvested 4.5 MMT of sunflowers (52% done) and 810 TMT of soybeans (24% done).
APK Inform said that Ukraine had exported a record 300 TMT of rapeseed in July, although they still expect 2014/15 total shipments to decline 19% to 1.8 MMT (out of a total production this year of 2.0 MMT). As mentioned yesterday with their barley shipments, this would appear to indicate that the bulk of their export efforts have all been concentrated into the front end of the marketing campaign, as is frequently their style.
They've also already shipped more than 4 MMT of the USDA's forecast full season exports of 10 MMT of wheat this year, with September expected to be their busiest month yet this season. This situation is likely to be replicated once the full weight of the Ukraine 2014 corn harvest hits in October/November.
The Farmers' Weekly said that the UK winter OSR area could fall by as much as 15% this year (for the 2015 harvest), to less than 700k ha for the first time since 2010. This is due to a combination of low prices and the new EU ban on neonicotinoids leading to a sharp rise in pest damage. This is probably something that will also be replicated across Europe.
What, if anything, will be planted in it's place? There's not a lot of excitement around wheat prices going forward, even if Nov 15 is at a GBP13/tonne premium in London and with Dec 15 EUR14/tonne higher than the front end in Paris tonight. There may be some who will see this as an opportunity to tackle their blackgrass problem and go for the fallow option, at least until the spring.
French milling wheat FOB Rouen is said to be offered in the market at EUR161/tonne (less than GBP128/tonne) for 76kg/hl, 220 hagberg and 11% protein material. New crop corn is EUR136/tonne (under GBP108/tonne) FOB Bordeaux/La Pallice. New crop Ukraine corn is now down to $170/tonne FOB the Black Sea (around GBP104.50/tonne).
