EU Grains End Lower, Early Russian And Ukraine Yields Up On A Year Ago

07/07/15 -- EU grains closed lower across the board, with Jul London wheat down GBP1.65/tonne to GBP118.50/tonne, Sep 15 Paris wheat was EUR4.00/tonne lower at EUR200.25/tonne, Aug 15 Paris corn was down EUR4.50/tonne at EUR187.00/tonne, whilst Aug 15 Paris rapeseed tumbled EUR6.25/tonne lower to EUR381.25/tonne.

The French Ag Ministry estimated the 2015 soft wheat harvest there at the second largest ever - 37.87 MMT. That's around 400 TMT up on a year ago, helped by increased plantings, even with estimated yields down from 7.48 MT/ha to 7.34 MT/ha.

French durum wheat output this year was pegged at 1.72 MMT, taking the total French all wheat crop to 39.59 MMT. It would surely have topped 40 MMT without the recent heat and dryness taking the shine off yields.

Informa cut their forecast for this year's EU-28 all wheat crop from 150.3 MMT to 148.5 MMT, a 4.6% decline on a year ago.

They also pared back their estimate for this year's barley production in the EU from 58.7 MMT to 57.5 MMT, a 4.5% fall compared to 2014.

Corn output in the Union was also trimmed, down from a previous 68.3 MMT to 68.1 MMT, a 7.6% drop versus last year.

Russia and Ukraine's harvests are ongoing, but running behind last year's pace hampered by rain in some areas. Yields are up on last year though.

In Russia they've so far cut 1.2 million ha versus 1.9 million ha a year ago. That's 2.5% of the planned area, producing a crop of 4.5 MMT to date (7.1 MMT a year ago), with average yields at 3.87 MT/ha, up from 3.75 MT/ha a year ago at this time.

That total includes 517k ha of winter wheat, some 1.9% of the anticipated area, producing 2 MMT of the crop so far. Yields are said to be averaging 3.81 MT/ha versus 3.77 MT/ha a year ago.

Ukraine's harvest is also delayed, with 501.5k ha cut so far compared to 2.34 million ha this time last year.

That's around 5% of the anticipated early grains area (which excludes corn), producing 1.53 MMT of mostly barley so far. There's a small amount of winter wheat in there (85.7k ha, or 1% of the planned area), yielding 3.2 MT/ha versus 2.9 MT/ha a year ago.

Around 36% of the Ukraine 2015 winter barley crop has now been harvested, along with 7% of their winter OSR.

The Rosario Grain Exchange estimated Argentine growers will plant the second smallest wheat area in 100 years this year. Plantings of 3.5 million ha would be the equivalent of an area around the size of the Netherlands.

Low profitability and government intervention in wheat trade, restricting foreign sales with quotas and duties, is the reason behind the cut. Not that long ago Argentina was one of the world's leading exporters of wheat.

Canada's wheat crop is in trouble from persistent dryness, which may cut production this year to 25 MMT or less, many are now saying. That would mean exports in 2015/16 would need to fall by 4 MMT at least, just to keep their stocks to usage ratio at what is already the tightest on record.

The USDA currently forecasts production there at 29 MMT, although they are due to revise that figure in Friday's upcoming world supply and demand estimates.