EU Grains End Lower On The Day And For The Week

14/08/15 -- EU grains closed lower on the day and for the week. At the close, Nov 15 London wheat was down GBP0.40/tonne to GBP117.85/tonne, Sep 15 Paris wheat was EUR1.50/tonne easier at EUR176.00/tonne, Nov 15 Paris corn was down EUR2.50/tonne to EUR178.75/tonne, whilst Nov 15 Paris rapeseed was EUR4.00/tonne lower at EUR371.25/tonne.

For the week that puts London wheat GBP2.05/tonne lower, whilst in Paris wheat was EUR3.75/tonne weaker, corn fell EUR4.75/tonne and rapeseed slumped EUR12.75/tonne.

Corn was easier despite another drop in ratings for the French crop. FranceAgriMer cut 3 points off the proportion of that rated good to very good, taking that down to 55%. A year ago that was 86%. Only 7% of the crop is rated in the top category compared to 20% of it this time last year.

The heat and dryness that's plagued this year's corn crop across Europe, appears to have largely come too late to adversely affect wheat though. FranceAgriMer today estimated the French soft wheat crop at an all time high 40.4 MMT, up 7.8% on a year ago.

They said that harvesting of that was 99% complete as of Monday. They said that the average yield this year was seen at 7.83 MT/ha, compared with the 5-year average of 7.26 MT/ha. Protein levels were similar to 2014, generally between 10.5% and 11.5%, and specific weights of around 80kg/hl were among the highest seen in the last 20 years. Durum wheat production was estimated at a further 1.8 MMT, talking the all wheat crop up to an all-time high 42.2 MMT.

This year's French winter barley crop was estimated at 9.6 MMT, up more than 14% on a year ago, as it also escaped the worst of the weather. The spring barley crop didn't do quite so well, with production forecast 9% lower at 2.9 MMT.

Similar comments apply to the French rapeseed crop, estimated to be 7% lower at 5.1 MMT.

At home the HGCA said that an impressive 40% of the UK winter barley crop had been harvested in the past week, with 90% of this year's harvest now complete. The combines have been busy with the winter OSR crop too, with harvesting of that up from 35% complete a week ago to 80% done this time round.

The UK 2015 winter wheat harvest is about 10% done, they said.

As far as yields go, results so far have been impressive, with winter barley averaging 7.3-7.5 MT/ha versus a 10-year average of 6.5 MT/ha. Winter OSR yields are seen at 3.6-3.8 MT/ha, not the highest on record, but above the 10-year average of 3.5 MT/ha.

It's still early days on wheat, but early yields for that are said to be averaging 7.9-8.1 MT/ha, up from 7.7 MT/ha averaged over the last 10 years.

The results of yesterday's Egyptian wheat tender also weighed on the market today. The best French wheat offer in that was more expensive on an FOB basis than the winning Russian and Ukraine bids were including freight.

It's noteworthy though that the one winning Russian bid was priced at $184.39/tonne FOB. With the rouble having fallen 2% this week versus the US dollar (and it's down 12% in the past month against the US currency), that's the equivalent of around RUB12,000 which is well above the level at which the current much-criticised floating export duty on wheat kicks in.

That is being blamed for the slow start to Russia's 2015 export campaign.

EU wheat and barley exports meanwhile have got off to a brisk start in the 2015/16 marketing year, with Brussels having granted 2.3 MMT worth of soft wheat export licences, along with a further 1.9 MMT worth approved for barley.

That's ahead of where things were this time a year ago, say the HGCA. Note that the EU Commission currently estimate the bloc's soft wheat exports this season at 27.6 MMT, down 15% on the 2014/15 record of 32.5 MMT. Barley exports are also predicted to be lower at 9.0 MMT versus 12.5 MMT in 2014/15.

In other news, Russia said that it had harvested 55.5 MMT of grains so far this season off almost 40% of the planned area. Average yields are 2.97 MT/ha versus 3.19 MT/ha a year ago.

That total includes 41.4 MMT of wheat off nearly 47% of the expected area with yields averaging 3.29 MT/ha, an 8% fall compared to 2014.

Ukraine's 2015/16 grain exports have hit the ground running, with almost 3.8 MMT already shipped out 6 1/2 weeks into the new season. That includes almost 1.5 MMT of wheat, 1.1 MMT of corn and 1.2 MMT of barley. There's a further 427 TMT of grains already loaded onto vessels waiting to sail, say the Ag Ministry.