EU Grains End Lower Following USDA Report
10/06/15 -- EU grains closed lower across the board, as their counterparts in Chicago would do later, following the release of the June WASDE report from the USDA.
At the finish Jul 15 London wheat ended GBP1.15/tonne lower at GBP118.20/tonne, Sep 15 Paris was EUR2.50/tonne weaker at EUR183.50/tonne, Aug 15 Paris corn was down EUR2.75/tonne at EUR164.75/tonne, whilst Aug 15 Paris rapeseed stumbled EUR1.75/tonne lower to close at EUR371.00/tonne.
Wheat had traded in the green in early trade, with both old and new crop London wheat matching yesterday's 2-month highs, but quickly turned negative.
There are lingering concerns over dryness in France. A Thompson Reuters crop tour in the Picardie region, one of the most productive areas, in northern France found a yield potential of around 8.5 MT/ha, but said that if rain doesn't arrive soon then that could drop below 8.0 MT/ha.
June rains are very important in determining final yields, they noted. If they do arrive, and they are in the forecast, then France could still be in for a record wheat crop this year, with plantings at a near 80 year high. The previous record soft wheat crop was the 38.2 MMT produced in 1998.
The French Ministry this week said that soft wheat plantings were at 5.17 million ha, and ODA recently pegged national yields at an average 7.70 MT/ha, potentially giving them a record 39.80 MMT crop this year.
Russia said that spring grain plantings there were 97.6% complete on 30.3 million ha. The spring wheat crop is now all in on 13.2 million ha, combined with 98.5% of the spring barley and 95.9% of the corn crop, said the Ag Ministry.
The president of the Russian Grain Union estimated grain production there at 95-96 MMT this year, down from 105.3 MMT a year ago. He estimated total grain exports in 2015/16 at 30 MMT, similar to this season, but 5 MMT below the country's potential due to the export tax on wheat.
He estimated wheat exports at 17-18 MMT versus 22 MMT this season, and pegged the wheat harvest at 54-55 MMT versus 59 MMT a year ago.
Later in the day, the USDA raised their forecast for this year's Russian wheat crop from 53.5 MMT to 55.0 MMT. Ukraine's crop was upped 1 MMT to 23 MMT and Europe's was increased from 150.3 MMT to 150.7 MMT.
The bottom line was that they added 2.62 MMT to global production in 2015/16, taking that up to 721.55 MMT, only a very small decline of less than 1 percent on last year's record output.
On the export front, they raised both Russia and Ukraine by 1 MMT from a month ago to 21 MMT and 11.5 MMT respectively. EU exports were left unchanged at 32.5 MMT.
Europe's 2015 corn crop was reduced marginally, down from 68.34 MMT to 68.14 MMT, and barley output here was also trimmed a fraction - down from 58.68 MMT to 58.54 MMT. The EU rapeseed crop was estimated at 22.1 MMT, a near 9% decline compared with last season. It is also nearly 3 MMT below projected consumption in 2015/16.
In other news, Ukraine said that they'd now exported 32.72 MMT of grains this season, including 10.54 MMT of wheat, 4.46 MMT of barley and 17.47 MMT of corn.
