EU Grains Trade Mostly Lower As Global Production Estimates Rise

10/09/15 -- EU grains traded mostly lower, with beleaguered front month Sep 15 Paris wheat pleased to go off the board today.

At the close, Nov 15 London wheat was unchanged at GBP112.00/tonne. In Paris, new front month Dec 15 wheat was down EUR0.25/tonne to EUR169.25/tonne, Nov 15 corn finished EUR1.00/tonne lower at EUR164.00/tonne and Nov 15 rapeseed ended up EUR1.50/tonne to EUR365.25/tonne.

At home, the HGCA said that the UK wheat harvest was now 70% complete as of Tuesday night, up from 60% done a week ago. Perhaps the most interesting development was that they increased their average yield forecast from 8.3-8.6 MT/ha a week ago to 8.5-8.7 MT/ha as more data coming in from the north confirmed earlier finding from the south. That now pegs this year's average yield at around 9-12% above the 10-year average. It also suggests that we might be looking at a crop in excess of 16 MMT this year.

One grower who farms in the Lincolnshire Wolds achieved a verified yield of 16.5 MT/ha from his crop of Reflection, breaking the current world record, previously set in New Zealand, they noted

Only 10% of the Scottish wheat harvest has so far been completed, they said.

The HGCA made no changes to their winter barley yield estimate, leaving that at 7.2-7.4 MT/ha - around 11-14% above the 10-year average. The spring barley harvest is 50% done, up 20 points on the week, and average yields here were pared back from last week's 5.9-6.2 MT/ha estimate to 5.8-6.0 MT/ha, but still 7-11% above average. Scotland are off to their tardiest spring barley harvest in the last 5-years, they added. They are only 15% done compared to around 60% complete by the end of the first week of September, they said.

The UK winter OSR harvest is 99% complete with yields averaging 3.6-3.8 MT/ha, they say. That's also an increase of 6-12% on the recent norm. Spring OSR harvesting is 20% complete, up from only 5% done a week ago. Their first yield forecast there was 2.5-2.75 MT/ha. That's better than the 5-year average of 2.0 MT/ha, "although these yield figures must be treated with caution as they are based on the small number of samples harvested to date from a limited number of regions," they noted.

Across the Channel the bins are also busting. FranceAgriMer increased their forecast for the French soft wheat crop from 40.4 MMT to a new record 40.7 MMT, which is now little different to the Farm Ministry's 40.8 MMT estimate.

They see 2015/16 French soft wheat ending stocks at a rather low looking 2.6 MMT versus 2.5 MMT in the season recently ended. Wheat exports will fall 3.3% to 18.79 MMT, they predict, but domestic consumption will rise hence carryout at only around last season's levels. News that Egypt's GASC is to raise the minimum moisture level on wheat imports from 13.0% to 13.5% through to the end of May might help French exports though.

FranceAgriMer forecast the French 2015 corn crop at 13.3 MMT, down 25.7% on last year's record and 200,000 MT below the Farm Ministry estimate. French 2015/16 corn exports will fall by almost a third to 5.37 MMT, they said.

The FAO raised their forecast for the world wheat crop by 5 MMT to 728 MMT, due to higher output in the EU, Russia and Ukraine, along with improved prospects for Australia. That will help nudge world ending stocks 4 MMT higher than previously expected to a 13-year high of 202 MMT, they said.

They increased the global 2015/16 corn crop by 4 MMT to 1011 MMT, as improved prospects in the US and South America more than offset lower production in the EU. World ending stocks were raised 5 MMT to 226 MMT.

Back home again, customs data shows that the UK exported 76,963 MT of wheat in July. Even that relatively low volume is more than six times the amount exported in July 2014. That's about as far as the good news goes though. The UK also imported 136,300 MT of wheat in July, and don't forget that Jun 30 ending stocks of almost 2 MMT were 71% up on a year previously.

The UK also imported 183,100 MT of corn in July, which is 238% more than the volume of wheat exported and an increase of 82% compared to 12 months previously.

The Russian Ag Ministry said that they have prepared a proposal to amend the current export duty on wheat, without saying how or what to. Any sign that their export effort would now be stepped up is bearish.

UkrAgroConsult said that Ukraine's rapeseed crop this year came in at only 1.5 MMT, the lowest since 2007 due to reduced plantings and unfavourable weather.