EU Grains Mostly Give Up Some Of Monday's Gains

Posted by Nogger - a legend in his own mind at 08:20 | Categorized as

15/09/15 -- EU grains closed mostly lower, giving up some, but not all, of Monday's gains in a mini Turnaround Tuesday trading session.

At the close, Nov 15 London wheat was down GBP0.10/tonne to GBP113.50/tonne. In Paris, Dec 15 wheat was down EUR1.25/tonne to EUR169.50/tonne, Nov 15 corn finished EUR0.50/tonne lower at EUR167.25/tonne and Nov 15 rapeseed ended up EUR1.25/tonne to EUR367.50/tonne.

In a bit of creative journalism the HGCA reported that Ukraine's 2016 rapeseed crop "could be as low as 1 MMT" quoting UkrAgroConsult, although the actual estimate given by the latter organisation was 1.0-1.5 MMT. Production this year was 1.7 MMT, down from 2.2 MMT in 2014 and 2.3 MMT in 2013.

Rains of only 40% of normal mean that "soil moisture has been low and the optimal planting window for the crop has been missed," said the HGCA. Any of the crop planted now carries an increased risk of winter-kill, they added.

Planting of winter OSR had only been completed on 409k ha as of Sep 9, the slowest pace since 2007 and down 39% versus what had been sown by the same date a year ago.

The Russian Ag Ministry said that the country's 2015 grain harvest was 71.6% complete on 33.6 million ha producing a crop of 83.6 MMT to date.

Wheat accounts for 55.7 MMT of that total off 76.6% of the planted area, with yields down 9.7% on a year ago at 2.71 MT/ha. Interestingly the USDA estimate final Russian wheat yields this year to be only 5.2% down on a year ago, and the bulk of what's left to be harvested is in lower yielding areas.

Even more striking is the data on Russian barley harvesting. That's said to be 78.3% complete by the Ag Ministry, producing a crop of 16.1 MMT to date, with average yields down 6.1% at 2.3 MT/ha. The USDA forecast final Russian barley yields up 7.5% year-on-year at 2.44 MT/ha, and again it's the lower yielding regions that have the bulk of the harvest left to go.

The Russian corn harvest is said to be 13.6% complete on 380k ha for a crop of 1.9 MMT so far.

Russia’s Grain Union estimated their 2015 total grain crop at 100.0 MMT versus the official Ag Ministry estimate of 103.0 MMT.

Russian growers have also now seeded 7.4 million ha, or 43% of the government target, with winter plantings for the 2016 harvest.

Anecdotal reports suggest that Russian exporters are holding back on shipments of wheat, hoping and expecting the export duty on that to be lower in the coming weeks.

Concerns remain over the state of the Chinese economy. The Shanghai Composite Index closed down 3.5% today. The pound was lower following news that UK inflation fell back to zero in August from a lofty 0.1% in July, pushing back ideas of an interest rate rise, All eyes now are on the US Federal Reserve tomorrow.