EU Grains Trade Higher Despite Mixed News Out Of China
08/09/15 -- EU grains closed mostly higher Tuesday. Whilst there was more gloomy economic news out of China - imports dropped 14.3% in August, and that exports fell 6.1% - the situation in Europe looks brighter. Germany's imports and exports were at record high levels in July it was revealed. The market chose to concentrate on the latter rather than the former today.
At the finish, Nov 15 London wheat was GBP0.90/tonne higher at GBP111.90/tonne, Sep 15 Paris wheat was up EUR1.00/tonne at EUR150.00/tonne, Nov 15 Paris corn was EUR3.00/tonne firmer at EUR165.75/tonne, whilst Nov 15 Paris rapeseed was EUR6.25/tonne steadier at EUR364.00/tonne.
China's Shanghai Composite index closed 2.9% higher today, reversing yesterday's losses, as the government there unveiled new measures intended to curb speculation. The market remains extremely nervous over China though.
Their think tank CNGOIC forecast the nation's 2015/16 sorghum imports at 7 MMT, down 30% compared to 2014/15, although still at historically high levels. Barley imports will drop almost as much, down nearly 28% to 6.5 MMT, they said. Europe, and most specifically France saw a huge growth in barley sales to the Far Eastern buyer in 2014/15, so it looks like these might drop back a little this season.
Ukraine may also stand to see reduced demand from China, which would leave it looking elsewhere for buyers. The Ag Ministry there say that the country will have a total grain harvest of 60.5 MMT this year, and project exports at an all time high of around 36 MMT. They've already hit the ground running with those in the first few months of 2015/16.
The 2015 Ukraine grain harvest is now said to be 71% done and stands at 37.4 MMT. Plantings of winter rapeseed for the 2016 harvest are now approaching 47% complete on 388k ha, the Ministry add.
In Russia, the 2015 grain harvest is 64.1% complete at 77.4 MMT, and winter grain planting (mostly wheat) is complete on more than 5 million ha, or 29.5% of plan, the country's Ag Ministry say.
Rusagrotrans raised their estimate for this year's Russian grain harvest from 100 MMT to a more specific 102.68 MMT. They now see wheat production beating last year's 59.7 MMT by half a million tonnes to 60.2 MMT. They forecast the 2015 Russian barley harvest at 17.4 MMT, down 3 MMT on a year ago and have corn output equal to that of 2014 at 11.4 MMT.
Down Under, Australia's ABARES have raised their forecast for the 2015 wheat crop there by 1.69 MMT to 25.28 MMT. That's a 6.8% increase on a year ago despite earlier El Nino related production fears. They also increased their estimate on the size of this year's Australian barley crop by 374 TMT to 8.62 MMT (up 7.6% on a year ago) as well as raising their canola crop forecast by 188 TMT to 3.15 MMT, a 6.4% increase versus 2014.
Reuters said that last week's Algerian wheat purchase was in fact for 550 TMT, not the 400 TMT originally reported. The prices paid were said to be around $195-196/tonne C&F - the equivalent of around GBP127/tonne including freight.
They've now bought around 3 MMT of wheat on the international stage for import between July and November this year. The world's third largest wheat buyer is expected to import a total of 7.7 MMT this season, an 8.5% increase versus 2014/15.
France will certainly be hoping to pick up a decent proportion of that business. Unlike in the case of Egypt, they do at least have a freight advantage into Algeria compared to the Black Sea nations.
South Korea's MFG tendered for 65 TMT of optional origin feed wheat. It may be that the Black Sea does win that one though.
