EU Grains Trade Lower Despite Weak Euro

15/07/15 -- EU grains closed mostly lower, with the French markets down despite continued euro weakness over Greece.

News that French wheat was priced out to the tune of around $20/tonne, even before the addition of more expensive freight, in yesterday's Egyptian tender adds a bearish tone.

So too does talk of better than expected Russian and Ukraine yields, increased production estimates, and a brisk start to the new 2015/16 export season from the latter.

At the close Nov 15 London wheat was down GBP0.50/tonne to GBP125.75/tonne, Sep 15 Paris wheat was EUR1.25/tonne easier at EUR191.25/tonne, Aug 15 Paris corn was down EUR4.00/tonne at EUR178.75/tonne, whilst Aug 15 Paris rapeseed slumped EUR6.25/tonne to EUR385.00/tonne.

Despite harvest delays, early Russian and Ukraine yields are said to be coming in at higher levels than a year ago.

Russian analyst ProZerno is now forecasting a grain crop there of 103.9 MMT this year, barely changed versus 105.3 MMT a year ago. That's a lot better than thoughts of a crop of only around 90-95 MMT that were being suggested a few months ago.

ProZerno say that high carryover stocks left over at the end of 2014/15 will allow total Russian grain exports in the new 2015/16 season to exceed those of the last one at 34 MMT.

That includes 25.1 MMT of wheat, 4.7 MMT of corn and 3 MMT of barley, they predict.

That's far higher than the official Russian Ag Ministry estimate for exports of 30 MMT in 2015/16, including 21 MMT of wheat.

Russia's 2014/15 grain exports were said to be 30.5 MMT, including 21.7 MMT of wheat, 5.3 MMT of barley and 3.0 MMT of corn.

Ukraine's 2015/16 exports have begun at a brisk pace, with 688 TMT of grains already shipped out so far, and a further 275 TMT already loaded onboard vessels waiting to leave, taking the season total so far to close on 1 MMT.

The volume already shipped out includes 131 TMT of wheat, 390 TMT of corn and 166 TMT of barley.

Bloomberg report that Speedwell Weather say that heat and dryness is stressing corn crops in Hungary, Europe's third largest producing nation.

Similar conditions are back on the cards for French corn this week. FranceAgriMer cut the proportion of French corn rated good to very good by ten percentage points in a week on Friday. Further downgrades now look likely.

As some growers ponder what they intend to plant for the 2016 harvets, the HGCA said that, as far as break crops go, winter oilseed rape is "the best of a bad bunch" when it comes to potential gross margins.

The oilseed comes third out of the usual range of crops to be planted for 2016 with a gross margin of GBP539/ha. First place goes to first milling wheat (with a gross margin of GBP713/ha) and second is first feed wheat (GBP653/ha). In last place is spring feed barley (GBP389/ha).