Nogger's Blog

08/06/15 -- EU grains closed mixed, but mostly firmer, in a fairly quiet start to what could be an interesting week, with the USDA's June WASDE report due out on Wednesday. Also due then is ABARES Australian crop report, and before that we expect the USDA's first soybean crop ratings of the season to be released tonight, plus an update on planting progress in the US for corn and soybeans. Fresh news was relatively light during European trading hours ahead of that lot though.

At the close Jul 15 London wheat was up GBP1.40/tonne at GBP117.95/tonne, Sep 15 Paris wheat was up EUR1.75/tonne to EUR186.25/tonne, Jun 15 Paris corn was EUR2.75/tonne higher at EUR167.75/tonne whilst Aug 15 Paris rapeseed fell EUR2.00/tonne to EUR374.50/tonne.

Analysts Agromarketinfo cut their estimate for this year's soft wheat crop in Spain, where temperatures have been searingly hot lately, from 5.75 MMT to 5.48 MMT, and a small drop versus 5.59 MMT a year ago. They raised their ideas on imports from 3.3 MMT a month ago to 3.7 MMT this time round, although that's still less than the 4.08 MMT that the country is expected to import in 2014/15.

Spanish barley production was also reduced, down from 7.39 MMT to 6.98 MMT, although that's still better than last year's 6.74 MMT. Barley import needs in 2015/16 were raised from 500 TMT to 600 TMT, also up versus 455 TMT in the current season.

They were unchanged on their Spanish 2015 corn production estimate at 4.23 MMT, down from 4.47 MMT a year ago. Corn imports were also forecast unchanged from a month ago at 4.23 MMT versus 5.45 MMT in 2014/15.

APK Inform said that Ukraine seaports exported more than 525 TMT of grains last week, up from the just under 421 TMT shipped out the previous week. Corn accounted for the vast majority of last week's exports (at more than 515 TMT), with barley making up the rest.

Russian seaports shipped out less than half those of Ukraine, at 258.5 TMT, in the first week of June. That total included 141.3 TMT of wheat, 64.7 TMT of corn and 52.4 TMT of barley.

Russia's exports since the export duty on wheat was cancelled on May 15 are 930 TMT of grains, including 533 TMT of wheat, 209 TMT of barley and 170 TMT of corn.

Total 2014/15 season Russian exports to date are now more than 29 MMT, a 17.7% rise on the same period in 2013/14. Wheat accounts for 20.6 MMT of that total (versus less than 18 MMT a year ago), barley a further 5.2 MMT (versus 2.5 MMT) and corn an additional 2.8 MMT (versus 3.9 MMT).

The Russian Association of Grain Exporters forecast 2014/15 carryout at a rather large 18 MMT.

In Central Russia winter wheat is generally just finishing flowering. Some winter wheat in the Kursk region, post flowering, is displaying drought stress despite recent rain, said agronomist Mike Lee who is currently undertaking a crop tour of the region.

The average winter wheat yield potential in Kursk is around 5.0 MT/ha, dropping to 4.2 MT/ha in Voronezh then 2.6 MT/ha in Saratov, he estimates.

A recent Thompson Reuters survey concluded that wheat yield outcome in southern Russia will be mixed this year. Travelling from Krasnodar, north and eastwards through Rostov to Volgograd, their tour essentially found a gradual deterioration in crop conditions. The bottom line though was that "the present situation for Russian wheat is not cataclysmic," they said.

Bulgaria estimated it's 2015 wheat crop at 4.3-4.5 MMT, down around 17% on the 5.3 MMT produced a year ago.

Private Israeli buyers tendered in the market for 115 TMT of EU/Black Sea origin corn and 65 TMT of feed wheat of a similar origin for delivery spread between the end of the month and September.

The USDA's FAS office in India cut their estimate for this year's wheat crop there to 87 MMT, down more than 9% on a year ago due to heavy rain and hail immediately prior to harvest time. They estimate domestic consumption at 92.8 MMT, but note that state owned stocks from previous bumper production years may not lead to a huge increase in imports in 2015/16.