EU Grains Mostly Lower On The Day And For The Week, Rapeseed Bucks The Trend Though

29/05/15 -- EU grains closed mostly lower on the day and for the week. The exception was rapeseed which again managed to buck the trend posting decent gains.

The day ended with Jul 15 London wheat down GBP0.40/tonne at GBP110.10/tonne, Sep 15 Paris wheat fell EUR3.00/tonne to EUR176.00/tonne, Jun 15 Paris corn was also EUR3.00/tonne easier at EUR151.50/tonne whilst Aug 15 Paris rapeseed rose EUR3.25/tonne to close at EUR365.75/tonne.

For the week, nearby London wheat was down GBP2.15/tonne, Paris wheat was EUR6.50/tonne lower, corn fell EUR2.75/tonne, but rapeseed added EUR6.75/tonne.

The story of the week is clearly rapeseed, for which the IGC yesterday painted a picture of significantly lower production and tightening supplies in 2015/16.

"World output is forecast to contract on smaller sowings and reduced yields," they said. They placed the global rapeseed crop at 67.8 MMT this year, down 3.6 MMT from last year and 600,000 MT below their previous forecast. It is also now 300,000 MT beneath that of the USDA earlier this month.

The crop in Europe was forecast 2.2 MMT lower than last year at 21.9 MMT, and Canada's will shrink 700,000 MT to 14.9 MMT, they added.

World rapeseed usage in 2015/16 was placed 1.4 MMT higher than production at 69.2 MMT. That means that 2015/16 world rapeseed/canola ending stocks are anticipated to fall by 26% year-on-year, they suggest.

It is worth noting also that the USDA have the EU-28 crop even lower than the IGC at 21.6 MMT this year, a near 11% decline on last year, and also 3.25 MMT less than anticipated EU consumption.

Old crop rapeseed stocks seem tighter than the market anticipated, meaning that the world crush in the final quarter of the current marketing year will decline 8.5% year-on-year to 15.21 MMT, say Oil World. They also predict a reduced crush in Q1 of 2015/16, down 3.5% versus the same period a year previously at 16.82 MMT.

The global grain market in the season ahead looks like nothing as tight, with the IGC yesterday adding 10 MMT to their estimated world wheat production estimate. With consumption only rising 4 MMT, that adds an additional 6 MMT to the bottom line carryout at the end of 2015/16.

The EU all wheat crop this year was forecast at 150.0 MMT, which is 6.1 MMT below last year's record, although 1.8 MMT more than predicted a month ago. Production in Russia (up 3 MMT from last month) and Ukraine (up 1 MMT) was also tweaked higher.

In other news, as the end of the season nears, Brussels said that they'd released 228,465 MT worth of soft wheat export licences this past week, a 65% decline on the previous week. That's the smallest volume in six weeks and the fifth lowest weekly total of the season. The season to date total is now 29.3 MMT, still up 11% on 26.4 MMT this time a year ago.

The fact that French wheat was comfortably priced out, and that there were plenty of Russian offers, in yesterday's GASC tender was another blow to Paris wheat this week.

The French harvest is drawing nearer, and FranceAgriMer today said that 80% of winter wheat there is now headed, up from 59% a week ago and versus 88% this time last year. Good to very good crop ratings were left unchanged at 91%, up from 75% a year ago. French winter and spring barley, and also corn ratings were trimmed back a little from last week, but are still promising at 89%, 93% and 88% good to very good respectively.

The French corn crop is now all in, and 95% emerged, versus 89% a week ago and 92% a year ago.

The jury is still out on Russian grain production potential this year. Spring plantings are now around 83% done, according to the Ag Ministry, on 25.7 million ha versus 27.5 million a year ago. Spring wheat is said to be 80% sown, with 85% of the spring barley crop in along with over 92% of the intended corn area.

Daytime highs in some parts of southern Russia are currently in the mid-90's, with things set to stay abnormally warm for the next 7 days, before cooling down after that. There are some fair rains in the forecast for the second half of next week and beyond though.

Things do appear more promising in Ukraine. Spring planting there is more or less done and the Deputy Ag Minister there today forecast a 2015 grain crop of almost 59 MMT versus domestic consumption of 27 MMT.

Elsewhere, the India Grain Association estimated the 2015 wheat crop there at only 80 MMT, a 16 MMT decline on last year and over 10 MMT less than the current official Ministry figure.