Nogger's Blog

24/11/14 -- EU grains traded mostly firmer, doing their best to ignore weakness in the overnight US globex markets, possibly in the belief that European wheat prices are already cheap enough with exports currently exceeding last year's record pace by around 900 TMT.

At the close Jan 15 London wheat was up GBP1.05/tonne to GBP129.05/tonne; Jan 15 Paris wheat was EUR1.00/tonne firmer at EUR178.75/tonne; Jan 15 Paris corn gained EUR1.00/tonne to EUR153.25/tonne; Feb 15 Paris rapeseed ended EUR3.00/tonne higher at EUR342.00/tonne.

Saudi Arabia bought 345 TMT of 12.5% hard milling wheat over the weekend for Feb/Mar shipment - at least a proportion of that will probably be of EU (possibly German) origin.

Last week's GASC purchase takes the total volume of wheat that they have bought for shipment in the 2014/15 season to 2.25 MMT, with France being the largest supplier, accounting for 840 TMT (37%) of that total.

The German Stats Office said that the country's Jul/Sep wheat export were 2.1 MMT, up 5% on a year previously. Imports were however also up, rising from 0.9 MMT to 1.1 MMT, in the same period.

The Germans have been a featured seller to Iran of late, now that Western sanctions against them have been eased. The country exported 231 TMT of wheat to Iran in September, the Stats Office reported. That makes them Germany's largest non-EU wheat home so far this season, with exports of 441 TMT Jul/Sep.

Meanwhile Reuters report a 58 TMT cargo of French feed wheat is currently loading in Rouen bound for South Korea, said to be the largest such shipment in 26 years, as they strive to explore all avenues to dispose of this year's much larger than usual lower grade crop.

The EU Commission's MARS unit raised their forecast for EU-28 barley yields in 2014 from 4.59 MT/ha to 4.61 MT/ha, still a 6.1% drop on last year, although 2.5% above the previous 5-year average. They were unchanged on their outlook for wheat, corn and OSR yields from a month ago.

They were also unchanged on their outlook for all UK yields - wheat, barley and OSR - pegging those at 8.24 MT/ha, 5.82 MT/ha and 3.81 MT/ha respectively.

Looking ahead, they said that sowing conditions for winter wheat throughout Europe had been "predominately favourable" - particularly in the major producing countries of France, Germany, the UK and Poland. Here in the UK they said that sowing conditions were "excellent" throughout September and early October.

Things still don't look so rosy in Russia though, where dryness, cold and variable snow cover is a problem. “There was a steep drop in temperatures during the last week of October (5-10 C below average). During the most severe frost events temperatures fell to -5 to -10 C in the Southern District, and between -10 to -15 C in the Central and Volga Districts. This cold spell further delayed crop development," they said.

“Due to soil moisture deficiencies and adverse thermal conditions, winter wheat is generally poorly established….The risk of winter frost kill is high. An early start to the winter season with freezing temperatures and unusual snow cover may cause significant damages to the underdeveloped crops," they added.

APK Inform said that Ukraine grain exports via seaports last week were up 48% week-on-week to 699 TMT. Corn shipments accounted for 481.5 TMT, or 69% of the weekly total versus 70% a week previously. Wheat exports were 181.4 TMT, or 26% versus 28% the week prior.

The Ukraine Ministry said that winter grains have now been planted on 7.65 million ha, or 102% of their original forecast. Wheat accounts for 6.5 million ha of that (104%) and barley 1.0 million ha (94%). They now expect final winter plantings to reach 7.6 million ha.

They estimate that only 89% of what has been planted has emerged so far however, potentially leaving an area of around 850-860,000 ha needing to be replanted in the spring - if growers can afford it that is. The Ministry said that 82% of what has emerged is in good to satisfactory condition.

They also said that around 200k ha of crops sown for the 2014 harvest in the troubled Donetsk and Lughansk region remain unharvested and are likely to do so.

Russia said that they'd exported 2.08 MMT of grains in the Nov 1-19 period, including 1.48 MMT of wheat (71%), 400 TMT of barley (19%) and 153 TMT of corn (7%).

That takes their total exports so far this season to 17.04 MMT, a rise of almost 30% compared with last season. Wheat accounts for 13.8 MMT (81%) of that total, and barley a further 2.34 MMT (14%).