Nogger's Blog

19/10/15 -- EU grains closed mostly lower, with more gloomy economic news from China setting a negative tone from the outset. The pound was up against both the dollar and euro on the perception that the UK is better insulated against a Chinese slump than the US or eurozone are.

At the close, Nov 15 London wheat was down GBP1.25/tonne at GBP113.00/tonne. In Paris, Dec 15 wheat was EUR1.25/tonne easier at EUR175.00/tonne, Nov 15 corn was down EUR2.75/tonne to EUR158.50/tonne. Just rapeseed managed a higher close, with Nov 15 up EUR1.00/tonne to EUR378.00/tonne.

This was the first time that a front month on Paris corn has closed below EUR160/tonne since the first few days of June, and this comes despite sharply lower production forecasts here in Europe and in near neighbour and large exporter Ukraine.

News that the Chinese economy "only" grew by 6.9% in the third quarter was seen as bearish, even if some expectations were for growth of 6.8%. This was in fact the first quarter to see growth of less than the official target of 7% since the start of the global economic crisis.

That seemed to overshadow everything else today, including news that the Ukraine Ag Ministry had cut their forecast for this year's corn crop there to 22.9 MMT, a near 20% slump on a year ago due to heat and dryness.

The ongoing Ukraine corn harvest is now said to be 61% complete at 12.88 MMT. The bare bones of that data suggests that even hitting 22.9 MMT could still be a tall order as it implies a final crop of only 21.1 MMT unless yields pick up from here on in.

The Ukraine sunflower harvest is 96% complete at just over 10 MMT, and they've also produced more than 3 MMT of soybeans off 84% of the planned area.

Winter grain plantings, almost exclusively wheat, are said to be 78% complete on almost 5.75 million ha. Wheat plantings of just over 5 million ha are at 78% of the government's expectations, and barley sowings of 525k ha are just 50% of what the Ukraine Ag Ministry originally forecast.

In Russia, the 2015 harvest is said to be 96.5% complete at 103.1 MMT. That includes 63.6 MMT of wheat (off 99.1% of the intended area), 18.1 MMT of barley (99.2%) and 8.3 MMT of corn (59.7%).

Russian winter grains are said to be planted on an area of 15.1 million ha (88.1% of the Ministry forecast), which is 800,000k less than this time last year.

Kazakhstan's harvest is said to be 99.8% complete at 19.6 MMT versus only 15.78 MMT this time a year ago.

APK Inform said that Ukraine seaports exported 550.3 TMT of grains last week, down from 896.2 TMT the previous week. Corn exports are now starting to pick up, as they accounted for 258.9 TMT of last week's total, that's the first time that they have beaten wheat this season. Wheat exports were 225.4 TMT and barley shipments were 66 TMT.

Russia's Ag Ministry said that it's grain exports Jul 1 to Oct 14 were 11.75 MMT, a 16.2% decline on a year ago. Wheat accounted for 9.12 MMT of that total, barley 1.94 MMT and corn 617 TMT.