EU Grains End Higher To Start The Week

Posted by Nogger - a legend in his own mind at 19:09 | Categorized as

14/09/15 -- EU grains traded higher to start the week in spill-over support from slightly lower than expected US corn yields and stocks estimates than the market expected from the USDA on Friday.

By the close, Nov 15 London wheat was up GBP1.60/tonne at GBP113.60/tonne, in Paris, Nov 15 wheat closed EUR3.00/tonne higher at EUR170.7500/tonne, Nov 15 corn was up EUR2.75/tonne to EUR167.75onne and Nov 15 rapeseed ended EUR3.00/tonne higher at EUR366.25/tonne

The fact that the USDA also wiped 4.3 MMT off their EU-28 corn production estimate also leans supportive. Although they left corn output in Ukraine unchanged at 27 MMT, most pundits think that this is too high, and that output this year will probably more like 23-25 MMT. Nevertheless, Ukraine might still be able to supply Europe with more than half it's forecast 16 MMT worth of corn import needs in 2015/16, said Agritel.

APK Inform reported that Ukraine seaports had exported 629.3 MMT of grains last week, down 22% from the previous week. That included 451.4 TMT of wheat, 66.4 TMT of corn and 111.5 TMT of barley. Exports of corn have now slowed right up waiting for the 2015 harvest to get going in earnest.

As mentioned on Friday, it's worth noting that average corn yields in Ukraine were left unchanged from a month ago by the USDA at 6.59 MT/ha. With admittedly only a very small area cut so far, the Ukraine Ag Ministry say that these are currently only averaging a little over 4 MT/ha, so this certainly wants monitoring as the harvest progresses.

Russian seaports meanwhile only exported 393.1 TMT of grains last week, down nearly 42% on 672.7 MMT the previous week. That included 329.8 TMT of wheat, 29.5 TMT of corn and 27.5 TMT of barley.

There are plans afoot to change the current export duty on wheat. It would seem that exporters are holding back a little until the government clarify exactly what the new system is likely to be. They've already said that changes, not an outright cancellation of the tax, is what is on the cards.

They have also said that they expect to soon make "significant" increases to the prices on offer for the government intervention programme.

Russia's 2015/16 exports so far (to Sep 9) total 6.79 MMT, a 22.5% decline compared to the same period a year ago (8.75 MMT). This season's exports consist of 5.28 MMT of wheat, 1.26 MMT of barley and 2.01 MMT of corn.

Spanish analysts AgroInfoMarket forecast the 2015 soft wheat crop there at 5.22 MMT, a 6.6% drop on a year ago. Despite the fall they see soft wheat imports declining 9.3% to 3.88 MMT, which means 2015/16 ending stocks will tumble 29.2% to 598 TMT.

Spanish barley production this year was little changed at 6.77 MMT, whilst corn output will be down 10.3% to 4.01 MMT, they added.