EU Grains Mostly Higher As French Crop Conditions Decline

10/07/15 -- EU grains mostly higher on the day, but lower for the week, with Nov 15 London wheat down GBP0.20/tonne to GBP131.30/tonne, Sep 15 Paris wheat was EUR0.75/tonne firmer at EUR197.50/tonne, Aug 15 Paris corn was up EUR1.00/tonne at EUR184.75/tonne, whilst Aug 15 Paris rapeseed rose EUR3.75/tonne to EUR392.50/tonne.

For the week that puts London wheat down GBP3.20/tonne, with Paris wheat down EUR6.50/tonne, corn down EUR9.00/tonne and rapeseed EUR1.75/tonne easier.

French wheat conditions continue to decline, with FranceAgriMer today cutting the proportion of the crop rated good to very good by 2 points to 75%. The winter wheat harvest was 15% done as of Monday night, up 12 points in a week.

The French barley harvest moved on nicely, progressing from 47% done a week ago to 85% complete as of Monday. Crop ratings there remained unchanged at 86% good to very good.

The same most certainly isn't true of the French corn crop though, FranceAgriMer slashed the good to very good ratings for that by 10 points on the week to 71%, as that now seemingly bears the brunt of the recent heat/dryness.

Agritel said that the French corn situation is "worrying" due to the lack of water, noting that high temperatures are back in the forecast for next week. Further crop condition declines therefore look likely.

Copa Cogeca cut their forecast for this year's French corn crop from 15.9 MMT to 15.5 MMT, and also reduced their outlook on French rapeseed production this year from a previous estimate of 5.5 MMT to 5.0 MMT.

“There is in particular huge uncertainty surrounding this years’ corn crop due to the high temperatures and also lack of effective insecticides to protect the crop against worms and other pests," they said.

The new French corn estimate represents a 14% drop on production a year ago, whilst their rapeseed estimate is a 9.4% decline versus 2014. They also forecast the French soft wheat crop down from a previous estimate of 37.4 MMT to 35.6 MMT, a decrease of more than 5% year-on-year.

They now see the EU-28 soft wheat crop down from a previous forecast of 138.4 MMT to 137.1 MMT, a 7.2% fall versus 2014. All wheat production is seen at 144.4 MMT, a 6.8% drop compared with 2014.

The EU-28 corn crop forecast was cut from 68.9 MMT to 66.0 MMT, down 7.8% on lest year, with barley production down 6.1% to 53.5 MMT. The EU rapeseed crop was estimated at 21.1 MMT, down from 22 MMT previously and 10.6% lower than 23.7 MMT a year ago.

The downwards rapeseed revision came "mainly as a result of the neonicotinoid seed treatment ban, poor weather conditions and a lack of plant protection products," they said.

In the UK they estimate the 2015 wheat crop at 15.1 MMT versus 16.6 MMT a year ago, with barley output down slightly at 6.95 MMT, and the rapeseed crop falling from 2.46 MMT to 2.24 MMT.

Adverse weather conditions in Spain saw them cut their forecasts for soft wheat (down from 5.6 MMT previously) to 5.1 MMT, corn (down from 4.6 MMT to 4.3 MMT) and barley (down from 6.9 MMT to 6.0 MMT).

The French port of Rouen only exported just over 75 TMT of grains this past week, down 42% on the previous week. Wheat shipments only accounted for 4,350 MT of that total.

Brussels announced 467 TMT worth of soft wheat export licences for the first week of the new season, up from 350 TMT worth in the same week a year ago.