EU Grains Higher To Start The Week
09/03/15 -- EU grains closed higher to start the week, on what looks like short-covering ahead to tomorrow's USDA report.
At the finish, Mar 15 London wheat was up GBP1.25/tonne at GBP117.50/tonne; Mar 15 Paris wheat was EUR3.25/tonne higher at EUR184.25/tonne; Jun 15 Paris corn was EUR1.75/tonne firmer at EUR160.75/tonne; May 15 Paris rapeseed was EUR3.25/tonne higher at EUR365.75/tonne.
Fresh news was relatively scarce ahead of the data from Washington tomorrow. Fund money is heavily short in Chicago wheat, which maybe explains why that was the unusual leader of the overnight Globex market's charge higher. EU grains went along for the ride.
Better gains for Paris wheat relative to those in London today are perhaps easily explained by the continued euro weakness, along with the fact highlighted in Friday night's report that the French market fell much more heavily last week than our local one.
Front month Mar 15 Paris wheat also goes off the board tomorrow, so some technical issues could also be behind tonight's close of that particular position.
What limited fresh news was about actually lent a bit bearish.
Late Friday, FranceAgriMer reported French winter wheat crop conditions at 91% good to very good, a one point rise on a week previously, and far higher than 74% this time a year ago. Winter barley ratings were left unchanged on last week at 90% good to very good, up from 72% a year ago.
French spring barley plantings are said to be 24% complete, that's only up 2 points on the previous week, but again much better than only 3% sown at this point in 2014. The crop is 7% emerged versus 2% a year ago.
French wheat exports in January are placed at 1.4 MMT, taking the season to date total (Jul14-Jan15) to 9.9 MMT, of which 5.3 MMT has gone outside the EU and 4.7 MMT to fellow bloc members.
The European Commission forecast the coming EU-28 wheat crop at 150.8 MMT, a 4% decline on last year, in it's first peak into 2015/16. Wheat exports were forecast down even more though, falling 12% to 28.2 MMT. The latter means that 2015/16 ending stocks will rise, despite the lower output estimate, up by 40% to 19.5 MMT, they predict.
The Commission estimate the 2015/15 EU-28 barley crop rising 1.6% to 68.4 MMT. As with wheat, barley exports are also forecast lower in 2015/16, down 5.3% at 9.0 MMT, with ending stocks up 8.3% to a five year high 10.4 MMT.
A relatively benign European winter has resulted in limited crop damage, they said.
For rapeseed, they see production down 12.4% at 21.1 MMT. Ending stocks are expected to decline 30% to 1.2 MMT.
Tomorrow's USDA report won't give us any estimates for 2015/16, they aren't expected until May.
