EU Grains Lower Across The Board Friday, Only Paris Rapeseed Manages Weekly Gains

27/11/15 -- EU grains closed lower across the board on the day, but mixed for the week. Rapeseed was the sole gainer compared with last Friday, despite falling 5 euros today, as the result of strong advances seen earlier in the week.

The session ended with with Jan 16 London wheat down GBP0.75/tonne at GBP113.25/tonne, Dec 15 Paris wheat down EUR0.75/tonne to EUR176.25/tonne, Jan 16 corn EUR1.00/tonne lower at EUR165.50/tonne and Feb 16 rapeseed EUR5.00/tonne weaker to EUR380.50/tonne.

For the week, Jan 16 London wheat was GBP0.95/tonne lower, Dec 15 Paris wheat was unchanged, Jan 16 Paris corn was EUR1.50/tonne lower and Fen 16 Paris rapeseed gained EUR3.50/tonne.

There hasn't been a great deal of fresh news this week. The market continues to debate the state of winter grains in Russia and Ukraine, and the implications for crop production there in 2016.

The outlook for lower EU and Ukraine rapeseed production next year, once more, is also in traders' minds, along with how the spat between Russia and Turkey will pan out amidst talk of a trade embargo. Russia's president Putin has described the downing of the Russian jet as a "stab in the back", and warned of "serious consequences" to come for Turkey. They currently import around 5 MMT of grains per annum from Russia.

A hangover from record world wheat, corn and soybean output this year, and the potential for bumper crops again in 2016, weighs though. World stocks are also at very high, and in some cases at record levels too.

The EU Commission today estimated the total grain crop here this year at 308.5 MMT, down 6.3% on last year. This year's soft wheat crop is now seen at 149.1 MMT, up a tad on 148.7 MMT a year ago. Barley production is also a bit higher at 60.8 MMT versus 60.2 MMT in 2014. The EU-28 corn crop is sharply lower however, down 26.2%, or more than 20 MMT, to 57.5 MMT.

They see EU-28 cereal consumption at 283.9 MMT versus 281.7 MMT in 2014/15, and exports at 42.1 MMT against 51.7 MMT last season. Soft wheat exports will total 27.9 MMT, a 16.2% drop compared to 33.3 MMT in 2014/15. Barley exports will tumble 21.3% to 10.0 MMT and those for corn will drop 37.5% to 2.5 MMT, they estimate.

EU-28 2015/16 cereal ending stocks are seen at 45.3 MMT versus 46.1 MMT at the end of last season, of which soft wheat stocks will leap 6.6 MMT to 17.5 MMT, they predict.

FranceAgriMer said that the French winter wheat crop was 99% sown, 94% emerged and 44% at the early tillering stage (all around the same levels as a year ago) as of Monday. The French winter barley crop was 100% planted, 99% emerged and 66% tillering, again very similar to the situation 12 months ago, they added.

The French corn crop is all just about in at 99% done. Winter wheat crop ratings are 98% good to very good, 5 points up on this time last year. French winter barley is 97% good to very good versus 93% a year ago.

Bloomberg reported that United Oilseeds estimate the UK rapeseed area at 536k ha, down 15% on a year ago and 29k ha less than the HGCA's early bird survey recently suggested. They see production in 2016 at 2.0 MMT, a 17% decline compared with this year and the smallest crop since 2009.

The Ukraine Ag Ministry reported that winter grains had so far emerged on only 5.3 million ha, or 80% of the planted area. Of the area that had germinated, only 64% is rated as being in good to satisfactory condition. That leaves 1.3 million ha of cropland so far yet to emerge, and an additional 1.9 million ha of winter grains in weak/thinned condition.

This doesn't include winter rapeseed. For that the Ministry say that 557k ha (86%) of what got planted has emerged, of which 32% is weak/thinned, meaning that 46% of winter OSR sowings are rated poorly or still haven't germinated at all yet.