EU Grains Mixed, Rapeseed Falls After Soybeans Hit 6-Year Low
23/11/15 -- EU grains began the week mixed. Rapeseed was the weakest of the bunch today following a poor beginning from Chicago soybeans.
At the close, new front month Jan 16 London wheat was down GBP0.45/tonne at GBP113.75/tonne, Dec 15 Paris wheat was up EUR1.00/tonne at EUR177.25/tonne, Jan 16 Paris corn was EUR0.50/tonne higher at EUR167.50/tonne, whilst Feb 16 Paris rapeseed fell EUR2.50/tonne to EUR374.25/tonne.
Chicago soybeans fell to a 6-year low in overnight trade following the news that opposition candidate Mauricio Macri won the weekend's presidential election run-off in Argentina. Whilst not unexpected, reports that a potential devaluation of the Argentine peso by as much as 35% sparked ideas that heavy farmer selling from the South American country could be imminent.
A Bloomberg report suggested that Argentine growers have amassed as much as a huge 22 MMT hoard to soybeans as a hedge against inflation and the falling value of the peso - around one-third of last season’s record crop.
Much of those stockpiles could now come onto the market in the months ahead, along with smaller but still significant volumes of corn and wheat, it is thought. In addition, wheat production could soon return to the halcyon days of production in the 15-17 MMT range, a regular feature of the "noughties" when Argentina was one of the leading wheat exporters in the world.
The Argentine situation just adds to the whole bearish vibe reverberating around the market at the moment.
In other news, MARS said in their monthly report that "temperatures from the end of October until mid-November were well above average across most of Europe, and the highest in our records (since 1975) for the United Kingdom, France, Germany, Scandinavia and the Baltic countries. Such temperatures are beneficial to the development of the emerged winter crops."
"Conditions improved in Poland, Ukraine and Russia, where beneficial rains and higher temperatures provided relief from the difficulties reported in the previous Bulletin. The preceding unfavourable germination conditions may yet have a knock-on effect on next year’s yields, depending on the winter and spring conditions to come," they added.
As far as winter wheat goes, that crop has gone in under generally favourable conditions in the leading EU producing nations.
In France "conditions have been predominantly good, allowing for slightly advanced sowing in all main producing areas; the sowing campaign has practically finished now." In Germany "sowing activities experienced many rain-induced interruptions in mid-October, but were completed with no problems at the beginning of November," they said.
At home in the UK meanwhile "sowing activities progressed well, and were practically completed in October, thanks to the drier than-usual autumn weather conditions," they added.
For rapeseed "the main EU-28 producers of rapeseed (Germany, France, and the UK, but excluding Poland) experienced favourable weather conditions around sowing and emergence," they said. For Poland though "sowing and emergence occurred under very complicated conditions. The persistent of dry conditions in August delayed sowing activities by several weeks. Farmers were eventually able to sow thanks to some rainfall in northern regions, but it was insufficient to replenish soil water reserves. Consequently, seeds germinated under unfavourable conditions. This made rapeseed plants more vulnerable to the low temperatures experienced in large parts of northern Europe in October, leading to poor crop establishment," they noted.
Less than ideal conditions were observed in Ukraine, although recent improved rains and above average temperatures may have improved conditions "some losses are likely for winter wheat, winter barley and rapeseed," they said. A very similar situation also occurred in the southern half of Russia too, they added.
Reuters reported of a 50,000 MT vessel loading wheat at the leading French export hub of Rouen bound for Indonesia - the first such shipment since 2009. That adds a bit of confidence to the market following news late last week of wheat loading at the southern port of Fos-sur-Mer bound for another "unusual" French home - Lebanon.
