French Grains Rise Aided By Weak Euro

17/06/15 -- EU grains closed mixed. London wheat was lower, but the Paris market closed higher helped by the weak euro following a Greek Central Bank statement that the country could be in for a "painful" eurozone exit.

Jul 15 London wheat ended GBP2.25/tonne lower at GBP113.00/tonne, Sep 15 Paris was up EUR1.75/tonne at EUR178.50/tonne, Aug 15 Paris corn was EUR0.50/tonne higher at EUR163.00/tonne, whilst Aug 15 Paris rapeseed was up EUR4.00/tonne to close at EUR375.00/tonne.

Germany's DRV cut their forecasts for the country's grain and rapeseed production this year due to persistent dryness. They now predict only an "average" cereal harvest of just over 47.7 MMT.

"This value is about 2 MMT below the forecast of the previous month and more than 8 percent below the record result in 2014 of 52 MMT. The reason for this adjustment is that in many parts of Germany continued dry, warm weather. In many regions, too little precipitation has fallen," they said.

A 4.6% reduction from their previous estimate added to the friendly tone for price prospects rapeseed. They now see this year's output 20% down on last year at just under 5 MMT.

They trimmed 4.2% off their previous estimate for German wheat production too, now pegging that at 25.78 MMT, down 2 MMT (or -7.2%) on a year ago.

Germany's winter barley crop was estimated at 8.6 MMT versus 9 MMT previously and down 9.5% on a year ago. Spring barley production is now seen 5.3% lower than a year ago at 1.96 MMT. Corn production is seen 9.1% lower at 4.67 MMT.

Ukraine said that it is on target to export a record volume of grain in 2014/15, with a total of 33.5 MMT shipped out so far. That includes 10.7 MMT of wheat, 4.5 MMT of barley and 18.1 MMT of corn.

Despite record shipments, the Ukraine State Stats Service said that domestic grain stocks as of Jun 1 were 49% higher than a year ago at around 10 MMT, including 4 MMT of wheat, 0.8 MMT of barley and 4.8 MMT of corn.

Russia's intervention fund picked up 7,425 MT of grain in today's latest purchasing round. They've now bought 1.1 MMT since buying began on Sep 30. The average price being paid for the best so called "grade 3" wheat being RUB9,964, the equivalent of around $184/tonne at today's exchange rate.

Winter barley harvesting is now said to be underway in the Stavropol region of southern Russia.

Bloomberg report that Chinese government inspectors have been touring UK farms and storage facilities with a view to adding Britain to the list of approved barley suppliers. Currently China will only accept barley from Denmark, France, Argentina, Australia, Canada and Ukraine, they say. France has been a big supplier of barley to the Far Eastern powerhouse this season.

There are reports of dryness continuing to build across the North China Plain, which may be linked to the developing El Nino event, and merits watching.

The region is a significant wheat and corn producing area. Although the winter wheat harvest there should pretty much be over by now, they won't start harvesting corn until September.