EU Grains Trade Lower To Start The Week
20/07/15 -- EU grains traded lower to start the week, in line with just about everything else.
At the close Nov 15 London wheat was down GBP1.20/tonne at GBP124.25/tonne, the contract's lowest finish in four weeks. Sep 15 Paris wheat was EUR3.00/tonne easier at EUR189.75/tonne, Aug 15 Paris corn was down EUR1.50tonne to EUR179.75/tonne, whilst Aug 15 Paris rapeseed was EUR1.75/tonne lower at EUR387.00/tonne.
The euro is off Friday's historic lows, although not by much. Some are suggesting that it's recent slump may have been a little overdone. The Greek banks have re-opened after being closed for 3 weeks, but things are far from sorted just yet.
The release of the minutes from the Bank of England's July MPC meeting are due to be issued on Wednesday, and could provide sterling with a bit more upside impetus if there's a hint of one or two members of the committee swaying towards raising interest rates.
Much of France is set to stay warmer than normal for the next couple of days, but a return to more seasonal temperatures is forecast from Wednesday onwards.
After than things could turn cooler, to much cooler than normal through to the beginning of August, not just across France but in the UK, Germany and Poland as well.
The 15 day forecast sees northern parts of France and Germany drier than normal, but with most other parts of Europe, save for the far east, getting above average precipitation for the time of year.
Ukraine's brisk start to the 2015/16 season continues, with almost 600 TMT of grains being shipped out of the country's seaports last week, according to APK Inform. That total included 138 TMT of wheat, 231 TMT of corn and 227 TMT of barley.
The country has now already exported more than 1 MMT of grains so far this month, most of which (620 TMT) has been corn.
In contrast Russia's exports have been a bit slow to get going.
The country has exported 434 TMT in the first half of the month, down 57% on a year ago and the smallest volume since 2008, say SovEcon. That includes 200 TMT of wheat, the lowest total since 2004, they say.
The slow harvest and new export tax on wheat are to blame, but exports are expected to pick up very soon, they add.
Russian grain exports via seaports last week were in fact 353 TMT, up from 143 TMT the previous week, so there's some evidence that things did indeed pick up in the second half of last week.
Most of what was shipped out last week was wheat (296 TMT).
Switching commodities, Oil World estimate the Canadian canola crop at 13.8 MMT this year, down 11.3% from 15.56 MMT a year ago and a 5-year low. Frost in May and subsequent drought are to blame, they say. The USDA estimated the Canadian crop at 14.6 MMT earlier this month.
Some private estimates place production much lower than both of these numbers.
Oil World's forecast for Canada's canola exports in 2015/16 is 7.55 MMT, down more than 1 MMT, or 12.7%, versus 2014/15. The USDA currently have these at 8.1 MMT.
With lower production and reduced exports also expected from Australia and Ukraine also this year, not to mention Europe too, things could get interesting in the second half of the season. The USDA currently estimate EU consumption at 3.3 MMT higher than production in 2015/16.
