EU Grains Slip Mostly Lower Ahead Of USDA Report

10/03/15 -- EU grains closed mostly lower, consolidating heading into the release of the March WASDE report from the USDA due at 5pm London time.

The day ended with Mar 15 London wheat down GBP1.05/tonne at GBP116.45tonne, May 15 Paris wheat was down EUR1.25/tonne at EUR186.00/tonne, Jun 15 Paris corn rose EUR1.2/tonne to EUR162.00/tonne and May 15 Paris rapeseed was down EUR0.25/tonne at EUR365.50/tonne.

The pound rose above 1.40 against the beleaguered euro for the first time since late 2007 as the ECB set about its new QE measures. Continued fears over the implications of a Greek exit from the eurozone were also a factor.

The USDA made few changes to their world wheat production estimates for 2014/15, with the global crop trimmed fractionally from 725 MMT to 724.8 MMT. They did however make some adjustments to world trade, with the EU forecast to increase exports this season to 31.5 MMT, up 500,000 MT from previously, and just behind last season's record 31.9 MMT.

EU 2014/15 wheat ending stocks were subsequently trimmed from 16.3 MMT to 15.8 MMT.

"The EU first overtook the United States as the world’s top wheat exporter in 2013/14 and the gap is projected to widen in 2014/15. The EU has a record crop and is the world’s most competitive supplier. French wheat has been priced below Black Sea for much of the season, due in part to lower-than-average quality," the USDA said.

"Although Russia and Ukraine shipped at a record pace during the first half of the marketing year, trade is expected to plunge on Russia’s export duty and Ukraine’s voluntary export limits," they added.

There were changes too to world trade in barley, with China's imports increased from the 4.5 MMT forecast previously to 6.0 MMT. EU exports were upped from 6.7 MMT to 7.5 MMT. EU barley ending stocks were subsequently cut from the previous estimate of 6.3 MMT to 5.5 MMT.

"China is traditionally the world’s largest malting barley importer; however, starting last year, imports of barley for feed use surged. This comes as China’s appetite for imported coarse grains has grown more than 25 percent year to year, to nearly 16 MMT," the USDA said.

"The EU, with its barley exports forecast the highest in 15 years, stands to gain the most this year from China’s growing demand. This comes after 2 years of good EU crops and as barley and other feed grain prices have fallen following 2 consecutive years of record world corn production," they added.

In other news, Russia said that they had exported 24.7 MMT of grains so far this season, a 29.7% rise on a year ago. That total includes 19 MMT of wheat, 3.8 MMT of barley and 1.6 MMT of corn.

Russia's seaports shipped 293,500 MT of grains in the week through to Mar 8, of which 90,700 MT was barley, 65,900 MT was wheat and 30,800 +MT was corn.