EU Grains Lower On The Day, Mixed For The Week

24/04/15 -- EU grains closed lower on the day, and mixed for the week.

The day ended with May 15 London wheat down GBP1.90/tonne at GBP113.40/tonne, May 15 Paris wheat closed EUR2.00/tonne lower at EUR183.00/tonne, Jun 15 Paris corn was EUR1.25/tonne lower at EUR160.75/tonne and May 15 Paris rapeseed was down EUR3.00/tonne at EUR375.50/tonne.

For the week overall that puts London wheat GBP1.90/tonne lower, with Paris wheat gaining a modest EUR0.25/tonne. Paris corn fell EUR2.00/tonne compared with last Friday and rapeseed was EUR1.50/tonne firmer.

The pound continues to run close to the 1.40 level against the ever-weak euro, reducing the effectiveness of UK wheat on the export market relative to material on the continent.

The IGB yesterday trimmed 4 MMT off their forecast for the world 2015/16 wheat crop, reducing that to 705 MMT, a 2.2% decline on production a year ago. Ending stocks were reduced 2 MMT to a still ample 194 MMT.

As ever, it is important to note where the changes are coming from. The global 2015/16 balance sheet contained anticipated production increases versus last month's forecasts for the EU-28 (up 1 MMT to 148.2 MMT), Russia (up 0.6 MMT to 52 MMT) and Ukraine (up 0.4 MMT to 20 MMT).

Wheat production potential for the season ahead was lowered in India (down 3.7 MMT to 94 MMT), China (down 2 MMT to 118 MMT) and Argentina (down 1 MMT to 12.5 MMT).

The 2015/16 export potential for the EU-28 was increased from 30.8 MMT to 31.6 MMT, Russia's was upped from 18 MMT to 18.6 MMT and Ukraine's was forecast 0.3 MMT higher at 8 MMT. Wheat exports were lowered for India, Argentina and Australia.

Despite corn production in Europe being raised from 66.9 MMT to 67.5 MMT in the year ahead, imports were also increased from 10 MMT to 10.7 MMT.

Other much higher crop estimates out this week came from Lanworth, who put Russia's 2015 wheat crop at 59.5 MMT, and Ukraine's at 23.2 MMT. MDA CropCast fell between the IGC and Lanworth, going for 53.9 MMT and 23.0 MMT respectively. The range of estimates indicates just how unclear production prospects still are in these two countries in particular.

The Russian Ministry reported that early spring grains have now been planted on 3.3 million ha, which is 1 million ha behind this time a year ago.

The Ukraine Ministry said that the country has exported 28.5 MMT of grains so far this season (versus 29.1 MMT this time last year), including 9.9 MMT of wheat (vs. 8.2 MMT), 14.1 MMT of corn (vs. 18.4 MMT) and 4.3 MMT of barley (vs. 2.2 MMT).

FranceAgriMer trimmed the proportion of the winter wheat crop rated good to very good from 92% to 91%, although that's still far better than 74% a year ago. The proportion of the winter barley crop rated in the top two categories was also cut back one point to 90% versus 73% this time last year. Spring barley rated good to very good was increased one point to 96%,

The proportion of the French winter wheat crop at the 2 node stage was pegged at 62% versus 25% a week ago and 83% this time last year. Winter barley at that stage was 90%, double that of last week, but still lower than 95% a year ago. Spring barley put at the early tillering stage was 72%, the same as a year ago, They said  that 57% of the French spring corn crop was now planted, similar to last year's progress.