EU Grains Fall, French Barley Harvest Now Underway

15/06/15 -- EU grains closed almost entirely in the red to start the week. The euro was little changed, despite the news that talks between Greece and EU officials had broken down over the weekend.

At the finish Jul 15 London wheat ended GBP1.20/tonne lower at GBP115.3.20/tonne, Sep 15 Paris was EUR4.00/tonne weaker at EUR176.25/tonne, Aug 15 Paris corn was down EUR1.75/tonne at EUR161.50/tonne, whilst Aug 15 Paris rapeseed fell EUR1.50/tonne to close at EUR371.00/tonne.

There wasn't a great deal of fresh news around to start the week. As the combines get ready to start rolling (they've already started in France), we are maybe now starting to see some pre-harvest pressure developing, especially considering the large volume of old crop stocks still being carried in the market and in the face of slack demand.

Ensus remains shut, and is likely to stay that way for "up to a year or more" according to a report on Reuters. That report also said that the company was in consultations with staff about possible job cuts at the plant.

Another bearish factor is the emerging news that crops in Russia, and particularly Ukraine, appear to be heading towards harvest in much better condition than had been expected earlier in the year.

Agritel became the latest analyst to up their forecast for Russia's 2015 wheat crop, increasing their estimate from 54 MMT to 55.5 MMT. They also raised their 2015/16 Russian wheat export forecast from 20.8 MMT to 21.1 MMT. They left their barley production estimate unchanged at 16.4 MMT, with exports in the coming season seen at 2.8 MMT. Corn production potential was raised from 11.7 MMT to a record 12.1 MMT.

In Ukraine, they forecast a wheat crop of 21.6 MMT this year, unchanged from previously, although they raised 2015/16 wheat exports from 9.7 MMT to 10.1 MMT. Ukraine's barley crop was increased from 6.7 MMT to 6.9 MMT, with exports seen at 2.4 MMT. Corn production was estimated at 26 MMT, with exports of 16 MMT.

APK Inform said that Ukraine seaports had exported 402.5 TMT of grains last week, down from 525.1 TMT the previous week. Corn accounted for over 84% of that total, and wheat the remainder.

The Ukraine Ag Ministry said that the country had now exported more than 33 MMT of grains this season, including 17.78 MMT of corn, 10.63 MMT of wheat and 4.46 MMT of barley.

The Ukraine State Stats Service said that winter losses in grains were only 2.5% this year versus 3.6% a year previously.

Russian-based agronomist Mike Lee is currently conducting a crop tour of southern Russia and Ukraine, and is reporting on some decent looking crops - particularly in Ukraine.

APK Inform said that Russia's grain exports via seaports last week totalled 280.5 MMT, up from 258.4 TMT the previous week, of which over 75% was wheat and the remainder corn.

The Russian Ag Ministry said that the country's grain exports to Jun 10 were 29.42 MMT, up 17.8% on a year ago. Wheat exports were 20.87 MMT (versus 18.15 MMT this time last year), barley exports stand at 5.22 MMT (2.54 MMT) and those for corn are 2.86 MMT (3.97 MMT).

The release if the regular weekly French crop condition report from FranceAgriMer was delayed from Friday until today due to "technical issues".

Today that said that the proportion of French wheat rated good to very good was down 2 points on a week previously at 87%, although that's still much better than 73% this time last year. French winter barley ratings were also trimmed 2 points to 86% good to very good (versus 71% a year ago). The proportion of spring barley in the top two categories was cut from 91% to 86%, and corn was reduced from 86% to 84%.

The report also said that the French winter barley harvest had just about begun as of last Monday, with 1% of the crop harvested in the Midi-Pyrenees region in the south of the country.

Egypt said that following a strong domestic wheat purchasing campaign, and including recent international buying, they now have enough wheat bought to last them through to the end of 2015.

Tunisia tendered for 59 TMT of durum wheat, 84 TMT of soft wheat and 75 TMT of feed barley, all of optional origin for Jul/Sep shipment. Syria tendered for 150 TMT of milling wheat. Russian wheat was said to be the cheapest offer in an Iraqi tender for hard wheat.