Nogger's Blog

04/06/15 -- EU grains closed mixed in another uneventful, limited news sort of a day.

Jul 15 London wheat ended down GBP0.75/tonne at GBP114.25/tonne, Sep 15 Paris was EUR1.50/tonne higher at EUR183.50/tonne, Jun 15 Paris corn was up EUR1.25/tonne at EUR157.50/tonne, whilst Aug 15 Paris rapeseed stumbled EUR2.75/tonne lower to close at EUR372.00/tonne.

The euro hit a five month high of close to 1.14 against the US dollar on optimism that a Greek deal was close, with the country saying it will make a scheduled payment to the IMF on Friday, although it closed the day well off those levels.

The FAO's AMIS released their June crop production forecasts, saying that "the supply outlook for all AMIS crops has improved since the previous month on account of higher production forecasts and inventory volumes. Against this backdrop, international prices of wheat, corn and soybeans remain under downward pressure."

They estimated the world 2015/16 wheat crop at 723 MMT, up 4 MMT from a month ago and now only 6 MMT short of last year's record. It is also significantly higher than the USDA's 719 MMT and the IGC's 715 MMT estimates. Global ending stocks were pegged 2 MMT higher than previously estimated, and than they are expected to be at the end of the current season, at 201 MMT.

They also added 7 MMT to their world corn production forecast, taking that up to 1.002 billion tonnes, again just short of last season's record 1.026 billion. Ending stocks were also raised 2 MMT to 219 MMT, although that's still slightly lower than 224 MMT at the end of the current campaign. That's far above the IGC's 187 MMT and the USDA's 192 MMT though.

"In the northern hemisphere, overall (wheat) conditions remain favourable. In Russia winter wheat conditions have improved and are mostly favourable, although there is some concern over spring wheat as planting is delayed due to wet weather, they said.

"In the EU, winter wheat conditions are generally good, however, there are two areas of concern, mainly due to water scarcity, in southern Spain and in southern Italy," they noted.

"The strengthening of El Niño conditions calls for a close monitoring of crops to be harvested during the second half of this year," they warned.

"In Ukraine, conditions are generally favourable and harvest is expected to be above average despite some dry conditions in southern and south-eastern regions," they added.

In contrast to the FAO, MDA CropCast cut their forecast for the 2015/16 world wheat crop by 1.1 MMT from a week ago to 710.5 MMT, some 12.5 MMT below the AMIS estimate. They only see production in Europe at 143.1 MMT versus the FAO's 148.5 MMT prediction.

Russia said that spring planting there is now 91.8% done on 28.5 million ha, down from 29.3 million ha this time last year. Wheat planting is 92.8% done, corn is 94.6% finished and barley is 93% complete, they say.

Rusagrotrans increased their forecast for Russia's grain exports in June to 1.4 MMT, of which 64% (900 TMT) will be wheat as shippers increase pace ahead of the introduction of the new Jul 1 export duty.