Nogger's Blog

19/11/14 -- EU grains traded lower, following an afternoon slump in the US markets, which saw Chicago wheat post double digit losses and with corn almost matching it.

At the close Nov 14 London wheat - which goes off the board on Friday and has zero open interest - was nominally down GBP1.15/tonne to GBP122.00/tonne; Jan 15 Paris wheat was EUR0.75/tonne lower at EUR172.50/tonne; Jan 15 Paris corn fell EUR1.00/tonne to EUR149.00/tonne; Feb 15 Paris rapeseed ended EUR2.50/tonne easier at EUR336.50/tonne.

The pound recovered marginally from yesterday's 14 month low against the US dollar, and also added a little bit of weight versus the euro.

Sterling is still almost 8% lower against the dollar compared to where it stood in early July. It has also fallen from around 1.28 against the single currency to under 1.25 so far this month.

Lloyds Bank put back their forecast for a UK interest rate rise from Feb 15 to Aug 15. In contrast, they neared their estimate for when rates will start to rise in the US from Sep 15 to Jun 15.

They said that the recent fall in value of the pound may have been a little overdone though, forecasting an exchange rate of around 1.59 against the dollar and 1.27 versus the euro by the end of the year. Even so, they now see the STG/USD rate at 1.53 by the end of 2015.

A weaker pound would in theory help the chances of the UK winning some welcome wheat export business, although sales have been sluggish so far this season.

Very good corn yields are being reported out of France as their harvest draws to a close (90% done as of Nov 10).

The General Association of Maize Growers (AGPM) raised their forecast for this year's French corn crop from 17.25 MMT to a new record 18 MMT today.

Ukraine's Ministry of Economic Development forecast this year's grain crop at a record 63.2 MMT, which is slightly higher than 63.0 MMT a year ago. They see wheat production at 24 MMT, with a barley crop of 9 MMT and corn output of 28 MMT.

Exports this year were forecast at a record 36.7 MMT, including 11.8 MMT of wheat, 4.2 MMT of barley and 20.2 MMT of corn.

Ukraine's 2014/15 grain ending stocks were estimated at 7.7 MMT versus the 8.3 MMT left over at the end of last season.

Ukraine's grain exports so far this season stand at 14.173 MMT, including 7.157 MMT of wheat, 3.316 MMT of barley and 3.555 MMT of corn. They now appear to be concentrating their export efforts on the latter as the harvesting of that draws to a close.

Russia still has around 600k ha of wheat to harvest this year, mainly in Siberia and the Urals region, according to Agritel. They may struggle to get it all in now.

The Philippines are tendering for 116,400 MT of feed wheat from Australia, the EU or the Black Sea region for March-May shipment.

The Australian Bureau of Meteorology said that there is a 70% chance of an El Nino developing by the end of their summer, up from 50% previously. Whilst this would bring drier weather for much of Australia, it would also typically mean increased rainfall for South America and parts of the US.