EU Wheat Gets A Leg Up From Firmer Chicago Market

Posted by Nogger - a legend in his own mind at 08:51 | Categorized as

16/03/15 -- EU grains closed mostly higher, reversing early losses, after the US wheat market turned sharply higher in afternoon trade.

At the finish, Mar 15 London wheat was GBP1.1/tonne firmer at GBP118.95/tonne, May 15 Paris wheat was up EUR2.50/tonne at EUR192.75/tonne, Jun 15 Paris corn rose EUR0.75/tonne to EUR165.00/tonne and May 15 Paris rapeseed climbed EUR2.00/tonne higher to EUR371.00/tonne.

Copa Cogeca estimated the EU-28 soft wheat crop in 2015 at 138.42 MMT, a fall of 6.5% versus a year ago. They see production in France virtually unchanged on last year at 37.4 MMT, but output will fall in many other countries with the exception of the Czech Republic (up 3.1% to 5.6 MMT) and Romania (up 2.3% to 7.57 MMT).

Here in the UK, the 2015 wheat crop will fall 15.9% to less than 14 MMT, they predict. Germany will see it's output decline 9.2% to 25.16 MMT and Poland will witness a drop of 14.3% to 9.24 MMT. Spain's production will decline 1.2% to 5.63 MMT, but the biggest fall of all will come from Bulgaria, whose crop will tumble 38.5% to just 3.15 MMT, they estimate.

Reduced plantings and lower anticipated yields are a recurring theme among those countries expected to see a decline in output this year.

Joining in with the debate over how far, if at all, UK wheat plantings have fallen this year, Copa Cogeca estimate the planted area here at only 1.687 million hectares. That's broadly in line with the HGCA's England and Wales reckonings, but well below the figure of close on 2 million given by Origin Enterprises last week, and represents a year-on-year decline of 12.5%.

UK yields will average 8.28 MT/ha this year, down nearly 4% from a year ago, Copa Cogeca forecast.

For barley, they see the EU-28 crop down a hefty 18% to only 46.65 MMT, according to their official press release. This data appears incomplete however, as they give no figures for spring barley production in either France or the UK. The UK winter barley crop is forecast at just under 2.5 MMT versus a little over 3 MMT last year.

For corn, Copa Cogeca estimate the EU-28 crop down 4.6% at 68.92 MMT.

The soft wheat and corn estimates are in the ballpark of those released by Strategie Grains last week (140.4 MMT and 68.2 MMT respectively). The barley number however is massively different compared to the French analysts figure of 58.1 MMT, and maybe should be taken with a pinch of salt.

Copa Cogeca meanwhile estimate the EU-28 OSR crop to fall 6.9% to 21.95 MMT, a three year low, with a planted area down by 2.2% and yields dropping 4.8%. They see the French crop down slightly at 5.48 MMT, but see UK production falling 9.2% to 2.27 MMT and the German crop falling a hefty 15.3% to 6.22 MMT - even if they do still retain top spot in the EU production table.

The sharp decline in EU rapeseed production expected this year is mainly as result of the neonicotinoid seed treatment ban, they said.

The chairman of the oilseeds working party Arnaud Rousseau said that "the situation is very serious, with declines of up to 1 million tonnes in rapeseed production estimated in Germany...What makes it worse is that there are no alternative tools for crop protection for the spring varieties and crops are being destroyed by flea beetle attacks."