Paris Wheat Ends Close To 11-Month Low

01/09/15 -- EU grains closed mostly lower to start the new month. More bad economic news out of China hit shares, with the stock markets in London, Paris and Germany all down around 2.5-3.0% in afternoon trade.

At the finish, Nov 15 London wheat was up GBP0.30/tonne to GBP113.95/tonne, Sep 15 Paris wheat was down EUR3.00/tonne to EUR157.25/tonne, Nov 15 Paris corn was down EUR2.25/tonne to EUR166.25/tonne, whilst Nov 15 Paris rapeseed was down EUR5.50/tonne to EUR361.50/tonne.

A dock workers strike at the French port of Rouen is reported to now be over, but silo operator Senalia is still closed for the intake of wheat, although it can at least now load vessels for export - if there's any interest that is.

That's keeping front month Sep 15 Paris wheat under pressure, which set fresh contract lows today, and also widened the gap between it and the benchmark Dec 15 contract to almost 9%. We are also now little more than a euro away from posting the lowest front month close on Paris wheat in 11 months.

The trade will be watching for the results of an Algerian tender for wheat, with material from the Baltic now competing with French origin, and Ukraine wheat also priced to sell.

Kazakhstan said that their 2015 harvest was 11.8% complete on 1.33 million ha producing a crop of 2.32 MMT to date. Average yields are 1.33 MT/ha, which believe it or not are up 24% on a year ago.

Ukraine seaports exported 639 TMT of grains last week, APK Inform said yesterday. That's a better performance than Russia, who's seaports only shipped out 497 TMT of grains last week.

The leading Black Sea Russia port of Novorossiysk exported 1.2 MMT of grains in August customs data shows, that's 17% below last year. The volume comprised 986 TMT of wheat and 221 TMT of barley. That's 30% less wheat than was shipped out in August 2014, as the current export duty hinders sales. That's up for review later this month though.

It was reported today that Russian wheat was in fact the cheapest offer in the recent Iraq tender, not Australian wheat as was suggested yesterday.

Farmers in both Russia and Ukraine have begun the 2015 corn harvest, although only small areas have been cut so far. Early Russian yields are reportedly down more than 12% at 4.78 MT/ha. Ukraine's are even lower at 4.2 MT/ha, suggesting that recent heat and dryness has indeed cut production potential this year.

The USDA's current yield forecasts are 5.00 MT/ha in Russia and 6.59 MT/ha in Ukraine, although it is still very early days.

They've also begun the 2015 soybean harvest in Ukraine, with 77k ha cut so far. Yields there are averaging 1.84 MT/ha. In addition, Ukraine growers are said to have planted 258k ha of winter rapeseed for the 2016 harvest, around 31% of the government target.

After rising solidly for 3 sessions, rapeseed was perhaps due for a correction and today was the day. The bad news out of China had crude oil back on the defensive, with NYMEX and Brent both down around $3/barrel.

That hit both soybean and rapeseed prices today, with the latter giving up some of the 7.3% gains it had managed in the past week.