EU Grains Mostly Lower On Harvest Pressure, Abundant Wheat Supplies Weigh

21/07/15 -- EU grains closed mixed, but mostly a little lower, on harvest pressure and, in wheat at least, a general abundant global supply situation.

At the close Nov 15 London wheat was down GBP0.75/tonne to GBP123.50/tonne, Sep 15 Paris wheat fell a euro to EUR188.75/tonne, Aug 15 Paris corn was up EUR0.75/tonne to EUR180.50/tonne, whilst Aug 15 Paris rapeseed rose EUR2.50/tonne to EUR389.50/tonne.

Keep in mind that the USDA currently have global 2015/16 wheat ending stocks estimated at nearly 220 MMT, up 8.6% versus the season just ended. It also means that more than 30% of this year's production will still be with us unused when we enter 2016/17.

The plentiful supply line in wheat was highlighted by the latest tender from Egypt's GASC. That enquiry attracted 1.3 MMT worth of offers, which Agrimoney noted was "an unusually large amount even for the start of the season."

They finished up booking 175,000 MT of all Russian wheat for September 1-10 shipment at a little over $205/tonne including freight.

That was well below the cheapest French offer which was priced at $211 on an FOB basis (almost $229/tonne when freight is added on), and also confirms that Russian sellers are very much in the market.

Romanian wheat was also offered to GASC, but was also priced out by the Russian material.

Russian exports have been slow to get going this so far season, with Rusagrotrans today cutting their forecast for the country's July grain shipments from 2.8 MMT to 2.1 MMT, down significantly on the 3.12 MMT shipped out a year previously.

They see wheat accounting for around 1.4 MMT of that total versus 2.67 MMT a year ago, with barley exports at 450,000 MT (from 387,000 MT a year ago) and corn shipments at 130,000 MT (from 46,000 MT in July 2014).

The Russian analysts also trimmed back their forecast for August grain exports from 3.8 MMT to 3.2 MMT, down from 4.64 MMT last year.

Separately, SovEcon estimated Russia's wheat exports in July at only 1 MMT on a delay to this year's harvest and trader concerns over the new floating duty on exports.

The Russian Ag Ministry said that this year's grain harvest was 13.5% complete on 6.3 million ha (versus 9.1 million ha a year ago), producing a crop of 23.4 MMT to date (31.7 MMT a year ago), with yields at 3.7 MT/ha, up 6.3% compared to 3.48 MT/ha in 2014.

Wheat accounts for 18.3 MMT of that total, and barley a further 2.7 MMT, they said.

Similarly, Ukraine's harvest is also behind last year's pace, but yields are also said to be up versus 2014, if only slightly.

The Ukraine Ag Ministry say that the early grain harvest (excluding corn) is 41% complete on 4.22 million ha (1.4 million less than a year ago), producing a crop of 13.54 MMT so far (17.92 MMT a year ago), with yields averaging 3.21 MT/ha versus 3.19 MT/ha this time last year.

The wheat harvest in Ukraine is 37% complete at 8.8 MMT, implying a final crop of 23.78 MMT this year.

In other news, Oil World trimmed their forecast for the EU-28 oilseed rape crop by 0.5 MMT to 21.5 MMT, down nearly 12% on a year ago.