Euro Strength Short-Lived, French Wheat Plantings Forecast At 80-Year High
04/12/15 -- EU grains drifted mostly lower on the day and for the week.
At the close, Jan 16 London wheat was down GBP1.65/tonne at GBP111.25/tonne, Dec 15 Paris wheat was down EUR1.00/tonne at EUR173.00/tonne, Jan 16 Paris corn was EUR0.25/tonne higher at EUR165.25/tonne, whilst Feb 16 Paris rapeseed fell EUR3.00/tonne to EUR381.00/tonne.
For Paris wheat this was the lowest close since Sep 24, and for Jan 16 London wheat it was a lifetime contract closing low.
For the week, London wheat fell GBP2.00/tonne, Paris wheat was down EUR3.25/tonne, corn was EUR0.25/tonne lower and rapeseed gained EUR0.50/tonne.
It's a little surprising that Paris wheat should find itself languishing at quite such sorry levels given the fact that this week's soft wheat export licence total was a marketing year high 1.04 MMT, an 88% increase on a week ago.
That takes the cumulative season to date total to 9.76 MMT. Whist that's down 23% versus this time year ago, just a week ago that figure was -27.5% and two weeks ago it was -30%, so things are finally moving in the right direction.
Yesterday's sudden bought of euro strength was relatively short-lived, and had dissipated by mid-morning. The outlook for 2016 remains bearish for the single currency, so further euro weakness, potentially boosting wheat exports, can be expected in 2016. France picked up 46% of this week's soft wheat export licences versus only 25% the previous week.
Brussels only issued 79 TMT worth of barley export licences this past week, although that season to date total is still up 17% on a year ago at 4.66 MMT.
Spain said that they'd imported 2.265 MMT of wheat in Q1 of 2015/16, a 5% increase versus the same period a year ago. They also imported 1.251 MMT of corn, up 10% compared to 12 months previously. Spanish wheat production fell 8.8% this year, and corn output was down 11.4% due to drought.
FranceAgriMer said that this year's French corn harvest is over. French winter wheat plantings are 99% complete and barley is 100% sown. They said that 57% of the French winter wheat crop is at the early tiller stage versus 44% a week ago and 55% this time last year. Winter barley is 77% tillering versus 66% last week and 75% a year ago.
French winter wheat is seen at 98% good to very good and winter barley is 97% good to very good, both versus 93% a year ago.
At home "crop establishment and development of winter planted cereals and oilseeds in the UK has got off to a good start," according to ADAS. "Mild and drier weather conditions at the end of September and through October, allowed drilling to pick up pace for winter planted cereals after the later completion of harvest. Adequately warm and moist soils and mild autumn weather benefitted crop establishment and crop development is said to be in line with last year," they added
Depending on who's estimates you want to run with, the UK winter wheat planted area for the 2016 harvest is broadly in line with that of 12 months ago - anywhere from 3% lower to 2.5% higher. Rapeseed plantings are seen declining between 7% and as much as 15%.
It's a similar situation in France, with the French Ministry today releasing their first estimates on plantings for the 2016 harvest.
They see the French winter wheat area up 1.5% to 5.22 million ha - the largest area sown for 80 years. Winter barley plantings are seen 2% higher at 1.32 million ha, and the OSR area is down 2% at 1.46 million ha, they predict.
