EU Grains Set New Lows

09/09/14 -- EU grains closed mostly lower. Paris wheat ended below long term front month support at EUR170/tonne for the first time in more than 4 years. London wheat also set a new more than 4-year low, as did Paris corn.

The day ended with Nov 14 London wheat down GBP1.45/tonne at GBP118.05/tonne, Nov 14 Paris wheat fell EUR1.00/tonne to EUR169.25/tonne, Nov 14 Paris corn was down EUR3.00/tonne to EUR144.75/tonne and Nov 14 Paris rapeseed was EUR0.75/tonne weaker at EUR324.00/tonne.

The 2014 Russian harvest now stands at a rather portly 81.6 MMT off "only" 64.4% of the anticipated area, with average yields up almost 19% at 2.72 MT/ha.

Wheat accounts for 50.3 MMT of that total, off 64.1% of plan, with barley adding a further 18.4 MMT (off 78.8% of plan). They've also now harvested 1.7 MMT of corn off 11.7% of the combinable area.

Kazakhstan's harvest meanwhile is now 27.8% done, producing a crop of 4.4 MMT so far.

In Ukraine, the 2014 early grain harvest is complete, and progress has now moved onto spring planted crops such as corn. The total grain harvest so far amounts to 36.3 MMT, off 67% of the planned area. That total includes 431 TMT of corn off 2% of the anticipated area, along with 2.6 MMT of sunseed off 33% of plan.

The Ukrainian Hydrometeorological Centre cut their forecast for the country's corn production this year from 29 MMT to 28 MMT, although that's still the second highest ever.

The Ukraine Ag Ministry said that the country would produce 58.5 MMT of grains this year, a 7% reduction versus the 2013 record crop. They said that the country's export potential is still a very healthy 32.3 MMT, including 9 MMT of wheat, 3.1 MMT of barley and 20 MMT of corn.

Whilst UK growers are attempting to ignore current low domestic prices, spare a thought for your cash-strapped counterparts in Ukraine.

Agritel report local prices in Ukraine are around EUR141/tonne for milling wheat (GBP112.80/tonne); EUR121/tonne for feed barley (GBP96.80/tonne); less than EUR100/tonne for new crop corn (GBP80/tonne); EUR257/tonne for rapeseed (GBP205.60/tonne). And these are delivered prices!

The option to simply sit tight and wait for a better day isn't generally one that's open to many Ukraine grain producers. Lack of adequate on-farm storage, and a pressing need for cash, mean that many have to take whatever is on offer straight off the combine. Meanwhile the plunge in value of the domestic currency means that the cost of basic resources such as agrochemicals, and the cost of gas, are up between 20-50% on last year, say APK Inform.

Elsewhere, the Czech harvest is now forecast at 7.7 MMT, a 9.1% rise on last year. That total includes 5.2 MMT of wheat (+10.6%), 1.95 MMT of barley (+21.9%) and 1.51 MMT of OSR (+4.9%).

France’s Farm Ministry increased their 2014 soft wheat crop production estimate from 37.3 MMT to 37.5 MMT, now up nearly 2% from last year. Corn production is now seen up from 15.1 to 16.0 MMT from last month (up 9% versus 2013).

Israel were said to have bought 80,000 MT of Ukrainian corn along with 50,000 MT of Ukrainian feed wheat in a tender.

"Frost and freezing conditions developed early this morning in western Alberta and central Saskatchewan, but severe damage to the wheat crop is not expected. Near-average growing degree days this season would indicate that spring wheat is virtually ripe and ready for harvest," said Martell Crop Projections.