EU Grains Correct A Little Lower - But Winter Crops Concerns Remain In Eastern Europe/FSU

27/10/15 -- EU grains closed almost universally lower, with wheat correcting some of yesterday's gains. Nearby Paris rapeseed is suddenly under a bit of pressure prior to that contracts expiry on Friday.

At the finish, Nov 15 London wheat was down GBP0.35/tonne at GBP114.90/tonne. In Paris, Dec 15 wheat was EUR1.50/tonne lower at EUR179.50/tonne, Nov 15 corn was down EUR1.25/tonne at EUR164.75/tonne and Nov 15 rapeseed was down EUR4.25/tonne to EUR370.50/tonne, although other months fell much more modestly.

The pound was under a bit of pressure today following the news that UK Q3 growth fell to 0.5% from 0.7% on Q2 and slightly below analyst expectations of 0.6%.

"The sowing of winter cereals has progressed without major problems in the EU’s largest producing countries, France, Germany and the UK," said the EU Commission's MARS unit.

However "dry conditions have persisted in Poland, Lithuania, western Ukraine and southern Russia. In these regions, the winter crops sown in September germinated under unfavourable conditions which further worsened due to the low temperatures that occurred in October," they noted.

"In Ukraine and Russia, the minimum temperatures dropped below zero in October, which is quite early compared to the normal thermal regime. The most critical regions are in western Ukraine and southern Russia, where the prolonged lack of precipitation is coupled with low temperatures and, consequently, seeds germinated under very unfavourable conditions," they added.

UkrAgroConsult said that relatively weak rains in Ukraine during the second half of October improved soil moisture only slightly. This was not enough to help late-seeded rapeseed to germinate, with almost half the crop at risk, they suggested.

Even if Ukraine was to get more or less ideal weather conditions from hereon in you could now safely write off at least 20% of the crop, and more pessimistically (which is where they stand) maybe 35%. Considering that the last time the Ukraine Ag Ministry reported on winter rapeseed plantings they were only around 75% complete, that all adds up to a sharply reduced crop in 2016.

The Ag Ministry there are still reporting on winter grain plantings, and have these at 82% complete on a fraction over 6 million ha, that's down 1 million ha on each of the last 2 years, and 1.5 million ha below the area sown in 2012.

Winter wheat planting is said to be 85% complete, and only 61% of the originally intended winter barley area has so far been seeded.

Meanwhile the 2015 Ukraine corn harvest is now reported at 70% complete at 14.78 MMT. That suggest final production of around 21.1 MMT, which is way below the USDA's expected 25 MMT.

APK Inform say that Ukraine seaports exported 923.4 TMT of grains last week, of which 46% (425.7 TMT) was corn, and 34% (314.3 TMT) was wheat.

Russian seaports shipped out 447.7 TMT of grains, of which 88.5% (393.3 TMT) was wheat in the same period, they add.

Syria are said to have bought 200,000 MT of soft milling wheat at around EUR192.50/tonne C&F.