Chicago Grains Drift Lower Into Holiday

24/12/15 -- Soycomplex: Beans closed lower despite weekly export sales of 2,069,700 MT for 2015/16 being up noticeably from the previous week and 99 percent from the prior 4-week average. That more or less doubled trade expectations for sales of 850,000 MT and 1.1 MMT and was the best total in 12 weeks. China took more than 1.5 MMT of that total. Exports of 1,619,100 MT were up 4 percent from the previous week, but down 6 percent from the prior 4-week average. The primary destination again was China (1,039,900 MT). Meal sales of 252,500 MT for 2015/2016 were also up noticeably from the previous week and up 51 percent from the prior 4-week average, coming at the top end of trade ideas of 100,000 – 250,000 MT. Talk of rain relief for northern/central Brazil seemed to usurp all of that today. Developments in Argentina add to the bearish vibe in the market at the moment. Jan 16 Soybeans closed at $8.75 1/4, down 6 1/2 cents; Mar 16 Soybeans closed at $8.73, down 7 3/4 cents; Jan 16 Soybean Meal closed at $269.00, down $3.40; Jan 16 Soybean Oil closed at 30.87, up 35 points. For the holiday shortened week that puts front month beans 17 cents lower, with meal down $12.00 and oil up 34 points.

Corn: The corn market closed around a cent or so lower on the day and in the region of 10 cents easier for the week. Weekly export sales were seen as a mixed bag. At 803,600 MT for 2015/16 these were up 39 percent from the previous week, but down 23 percent from the prior 4-week average. They did however beat trade expectations of 500,000 and 750,000 MT and last week's 579,449 MT total. Increases were reported for Mexico (323,600 MT), Colombia (159,700 MT), Saudi Arabia (143,700 MT), Japan (143,100 MT), El Salvador (79,500 MT), Panama (36,300 MT) and Jamaica (34,500 MT). Exports of 823,600 MT were though a marketing-year high, up 66 percent from the previous week and 75 percent from the prior 4-week average. Separately, South Korea's Kocopia were reported to have bought 55,000 MT of US origin corn for April shipment. The trade remains nervous that recent developments in Argentina are a sign that the corn export floodgates there are soon to about to open. Rain relief talk in northern/central Brazil also adds pressure in a market that will be glad to see the end of 2015. Will 2016 bring anything better? Mar 16 Corn closed at $3.64 1/2, down 1 cent; May 16 Corn closed at $3.70 3/4, down 1 cent. For the week that puts Mar 16 corn exactly 10 cents lower, with May 16 down 9 3/4 cents.

Wheat: The wheat market closed lower - in line with the other markets. Weekly export sales of 370,300 MT for delivery in marketing year 2015/16 were up 16 percent from the previous week and 19 percent from the prior 4-week average, but still less than stellar. Trade expectations were for sales of 250-500,000 MT. Increases were reported for Japan (94,800 MT), Mexico (87,900 MT), Nigeria (54,700 MT), Yemen (47,300 MT), Guatemala (34,400 MT), Ecuador (20,000 MT) and Colombia (19,200 MT). Exports of 407,300 MT were up 23 percent from the previous week and 35 percent from the prior 4-week average. The trade is still digesting the news that Argentine wheat is now the cheapest global offer, based on yesterday's Egyptian tender at least. Priced around $175/tonne before freight, it easily beat the most competitive French and Russian bids, leaving US wheat hopelessly stranded. "It's the equivalent to $4.30-4.40 a bushel basis March," said one US analyst. Morocco announced that it was to cut the import duty on wheat from 50% to 30%. Egypt said that following yesterday's purchase they now have enough wheat bought to last them until the first week of May. Mar 16 CBOT Wheat closed at $4.67 1/2, down 2 cents; Mar 16 KCBT Wheat closed at $4.67 1/2, down 1 1/2 cents; Mar 16 MGEX Wheat closed at $4.95, down 1 3/4 cents. For the week that puts CBOT wheat 25 1/2 cents lower, with Kansas down 24 3/4 cents and Minneapolis falling 22 1/2 cents.

EU Grains Quiet Ahead Of Holiday

24/12/15 -- EU grains finished a predictably subdued holiday-shortened trading session with little change.

At the close of trading, Jan 16 London wheat was down GBP0.30/tonne at GBP112.45/tonne. In Paris, Mar 16 wheat was up EUR0.50/tonne at EUR174.00/tonne, Jan 16 corn fell EUR0.50/tonne to EUR150.50/tonne and Feb 16 rapeseed rose EUR0.25/tonne to EUR374.75/tonne.

For the short week, London wheat ended virtually unchanged from last Friday, with Paris wheat down EUR2.25/tonne, corn shedding EUR9.00/tonne and rapeseed adding EUR0.75/tonne.

Fresh news was understandably thin on the ground today. Yesterday's victory for Argentine wheat in Egypt's latest tender was certainly news of merit this week, particularly the magnitude of difference compared what was put up from them compared to "local favourites" France and Russia - around $12.50-17.50/tonne cheaper on an FOB basis.

"These developments are likely to give ammunition to lobbyists in Russia calling for the removal of the export tax. With changes in the Argentine market, Russia is the only mainstream exporter with export taxes in place so we should expect the duty to be reduced or set to zero if Russia is to meet its own export targets. The market clearly sees this as bearish, but before we know it we’ll be back into a weather market, particularly given the minimal amount of snow cover for many winter wheat crops," said the HGCA's Jack Watts.

The recent weakness of the Argentine peso is also a factor, and one that highlights the fact that currency considerations are likely to have a significant impact on grain prices in 2016.

It is interesting therefore, and offers maybe a small crumb of comfort to UK growers, to see major analysts revising down their forecasts for STG/EUR strength over the coming months.

News this week that the UK economy grew by 0.4% in the third quarter of the year seemingly adds to the case deferring a possible UK interest rate rise early in 2016.

Barclays yesterday became the latest analyst to pare back their forecast on the outlook for the pound versus the euro. They were pretty bullish on sterling a month or two back, estimating a GBP/EUR peak of around 1.47 by Q3 of 2016. They're now saying only 1.37 in Q1 and 1.38 in Q2 of next year.

As far as the GBP/USD trajectory goes, they are now forecasting 1.47 in Q1 and 1.43 in Q2. For the EUR/USD they are considerably less bearish than they were, with latest ideas of 1.07 in Q1 and 1.03 in Q2 far better than thoughts of parity and 0.98 just a month ago.

All of that could mean that he case for London wheat is not quite so bearish compared to the market in Paris as it seemed a month or two back. Only time will tell, although UK exports have improved they certainly aren't pulling up too many trees right now.

UK growers then are faced with a similar set of circumstances to those they faced 12 months ago - albeit that they've probably now got even more old crop sat unsold around them than they did back then.

The good old forward carry isn't putting too much pressure on those that can afford, and have the space to do so, to carry old crop into new. There's around a GBP12.50/tonne premium on offer tonight to sell Nov 15 over Jan 15 - around a pound more than was on the table a fortnight ago and in fact better than the GBP9.15/tonne carrot that was dangling there last Christmas Eve.

The almost 2 year Jan 15 - Nov 16 premium a year ago was incidentally GBP12.75/tonne and tonight the differential on offer to carry front month Jan 16 wheat all the way through the next crop year and into Nov 17 is GBP18.60/tonne.

At the end of the day they are pretty hefty premiums, and ones that are worth possibly pondering over during the festive break.

Chicago Grains Drift Lower Despite Some South American Weather Concerns

23/12/15 -- Soycomplex: Beans closed a touch lower, although Brazilian planting delays remain. "Hot and dry weather across central Brazil is delaying the completion of the 2015/16 soybean planting as well as forcing some farmers to replant their soybeans. As a result, various farm organizations in the states of Mato Grosso and Goias are petitioning the state government to grant an extension of 30 days concerning the last day when farmers are permitted to plant soybeans," said Dr Cordonnier. IMEA recently cut their forecast for the soybean harvest in Mato Grosso by 1 MMT to 28.3 MMT citing dryness. Nevertheless, a probable record crop is still on the cards again nationally. Argentina is said to be around 90% planted with their first lot of soybean planting, and 50% done with their second wave, according to the Buenos Aires Grain Exchange. Exports from both countries will remain strong in 2015/16, helped by local currency weakness and the phasing out of the export tax on beans in Argentina. Trade estimates for tomorrow's US weekly export sales report on beans are 850,000 MT and 1.1 MMT and 100,000 – 250,000 MT on meal. Jan 16 Soybeans settled at $8.81 3/4, down 3 1/2 cents; Mar 16 Soybeans settled at $8.80 3/4, down 4 3/4 cents; Jan 16 Soybean Meal settled at $272.40, down $4.50; Jan 16 Soybean Oil settled at 30.52, up 8 points.

Corn: The corn market closed fractionally lower. Talk of late bean plantings in central/northern Brazil inevitably leads to discussion of second string "safrinha" corn going in late, or some not at all. The weekly Energy Dept report had ethanol production down to 973,000 barrels/day, down from 1 million barrels per day for the second time in four weeks last week. Ethanol stocks were up 100,000 barrels at 20.4 million barrels. With Argentina surprising the market somewhat with a very cheap offer on wheat for Egypt's tender today, the trade may well be considering if it will soon start to do likewise on corn under the new leadership of president Macri. The Buenos Aires Grain Exchange stuck by their Argentine 2015/16 corn for grain planting estimate of 2.85 million ha, of which they say planting is 68.7% complete. That's still a sharp reduction on sowings of 3.4 million ha a year ago, and quite a few think that the 11th hour Macri election victory could have come just in time to spur that area up to 3 million ha or more in light of the more relaxed export vibe. Trade estimates for tomorrow's weekly export sales report are in the region of 500,000 and 750,000 MT. Mar 16 Corn settled at $3.65 1/2, down 3/4 cent; May 16 Corn settled at $3.71 3/4, down 3/4 cent.

Wheat: The wheat market closed with small losses. US wheat was never likely to be in with a shout of winning a slice of the Egyptian tender, but despite rumblings that Argentine wheat might feature, it was a surprise to see them win so emphatically. The cheapest, and winning, FOB offers out of Argentina were $174.85/tonne and $176.20/tonne. They were well over $10/tonne below the best French FOB bids, and around $17.50/tonne under the lowest Russian offer. It would seem that the change of leadership and subsequent removal of the export duty on wheat in Argentina has indeed opened up some fresh supply pipeline. More time will be needed to see if this was little more than a one-off. Argentina have now harvested more than two thirds of their new crop wheat area for a crop of 6.43 MMT to date. With heavy interest likely from Brazil in the season ahead, exactly how much wheat Argentina will have to send to such far flung destinations remains to be seen, even if international freight is cheap at the moment. Syria were said to have bought 200,000 MT of Russian wheat in a tender. Weekly export sales of 250-500,000 MT are expected tomorrow. May 16 CBOT Wheat settled at $4.77, down 2 cents; May 16 KCBT Wheat settled at $4.79, down 2 cents; May 16 MGEX Wheat settled at $5.06, down 1/4 cent.

EU Grains Mixed, Argentina Scores Rare Egyptian Tender Victory

23/12/15 -- EU grains closed narrowly mixed, just for a change, with the exception of the nearby, getting technical and soon to expire Jan 16 Paris corn contract. The market seems generally to be trading water ahead of the year end in typically thin pre-holiday trade.

At the finish, Jan 16 London wheat was unchanged at GBP112.75/tonne, Mar 16 Paris wheat was down EUR0.50/tonne to EUR173.50/tonne, Jan 16 corn slumped EUR6.00/tonne to EUR151.00/tonne and Feb 16 rapeseed was EUR0.25/tonne higher to EUR374.50/tonne.

The day's most interesting development came in the form of the latest tender for wheat for Jan 21-31 shipment from Egypt's GASC.

This was won by Argentine wheat from Louis Dreyfus, of which GASC purchased two cargoes (120,000 MT in total) priced at $174.88/tonne and $176.20/tonne each on an FOB basis plus freight of $15.40/tonne on both. That takes the C&F cost up to $190.74/tonne.

These were said to be the first successful winning bids for Argentine wheat - a previous regular player in such tenders in the past - for 3 years. An interesting development following the recent leadership change and subsequent removal of the export duty on wheat in Argentina.

The best other offers on the table on an FOB basis were: French $187.42/tonne; Russian $193.00/tonne; Romanian $196.70/tonne; Ukraine $201.93/tonne.

So, Argentine wheat was priced to sell, at more than $10/tonne below the best French offer. Even adding on lower freight from France the winning Argentine bids came in on average $5.18/tonne cheaper. Whether the trade focuses in this aspect, or the fact that French wheat was more than $5.50/tonne cheaper than Russian wheat (and that Ukraine offers already seem to be drying up) remains to be seen.

Ukraine again seems to have concentrated the bulk of its wheat export efforts into the first half of the season, as is customary for them. Ukraine grain exports so far this season are now 20 MMT, up 18% versus this time a year ago. The Ukraine Ministry currently estimate full season grain exports at 36 MMT, beating the 2014/15 record of 34.8 MMT by 3.4%.

However, given the much smaller size of this year's Ukraine corn crop this might ultimately prove to be quite a tall order. Barley exports, as is typical for them, have already almost hit the anticipated total for the whole of 2015/16.

Back on the international tender front, Syria were said to have bought 200,000 MT of Russian wheat. Jordan were said to have passed on a tender for 100,000 MT of hard wheat for LH Apr/FH May shipment and immediately re-issued a fresh tender for the same.

Algeria said that they'd imported 12.3 MMT of grains in the first 11 months of 2015, a 5% increase on a year ago. Soft wheat imports were up 21.6% at 6.08 MMT.

There are a few rumblings that the current very mild weather (for the time of year) across Europe, which is forecast to last through at least until the end of the first week of January, could leave EU crops vulnerable to a sudden hard freeze (should we get one) a bit later down the line.

This was alluded to in the recent MARS crop report. "Winter crops were prevented from gaining frost tolerance due to the mild temperatures in these regions, and are now potentially exposed to frost kill if temperatures abruptly move to seasonal values - even though this is not forecast for the coming days," they said.

This is getting a bit of air-time, much as the "avalanche" of (now lost) money betting on a white Christmas was a few months ago, in what currently appears to be a "what do we talk about on a no news day like this" sort of a way.

For those growers pondering their marketing moves for 2016. hope still remains a pretty weak strategy.

Chicago Grains Grind Lower On Ample Supplies

22/12/15 -- Soycomplex: Beans closed lower despite lingering drought talk in Brazil's top producing Mato Grosso state, where moisture deficits range from 47% to 53% of normal, according to Martell Crop Projections. Focus seemed to shift today to slacker demand and more than ample global supplies. The outlook in Brazil is still for a record crop in 2015/16, and world carryout is seen up 6.3% at the end of the season, having risen 24.1% the season before that and 11.3% the season prior to that. That puts 2015/16 world inventories at 82.58 MMT - the largest on record and more than 49% higher than they were back in 2012/13. Let's hope that Chinese demand remains at the oft quoted "insatiable" levels! Jan 16 Soybeans settled at $8.85 1/4, down 6 cents; Mar 16 Soybeans settled at $8.85 1/2, down 6 cents; Jan 16 Soybean Meal settled at $276.90, down $2.10; Jan 16 Soybean Oil settled at 30.44, down 33 points.

Corn: The corn market closed lower for a second straight session. It too is concerned about relatively slack demand for US product, with cumulative season-to-date export inspections reported at 22% smaller than last year yesterday. US dollar strength, and the outlook for further gains in 2016 is also a problem in that respect, as too are crude oil prices hovering around multi-year lows. The world stocks situation for corn is similar to that for beans too. Carryout in 2015/16 is seen up 1.8% at 211.85 MMT, but that is 59.4% higher than the total we were looking at back in 2012/13. Ukraine's corn exports in November were reported at 1.853 MMT, down 17% versus November 2014. October to November corn exports were said to be down 7% than the same period a year ago. Production there is about 19% lower this year, according to the USDA. Mar 16 Corn settled at $3.66 1/4, down 5 3/4 cents; May 16 Corn settled at $3.72 1/2, down 5 1/2 cents.

Wheat: The wheat market closed lower. Three record large world wheat crops in a row and global stocks up almost 30% compared to 2012/13 paint a picture of very ample supplies. And US inventories in particular are struggling to find homes in the face of fierce competition from elsewhere around the globe: Europe, the Black Sea, Canada, Australia and new kid back on the block Argentina. Prospects for a firmer US dollar again in the New Year therefore don't help. YTD US export inspections are already nearly 14% smaller than last year, as reported by the USDA yesterday. They are currently only predicted to be 3.3% down at the end of the season. Morocco tendered for 150,000 MT of domestic wheat. Egypt tendered for an unspecified volume of wheat for January 21-31 delivery late in the day, with the results expected tomorrow afternoon. Mar 16 CBOT Wheat settled at $4.79, down 7 1/4 cents; Mar 16 KCBT Wheat settled at $4.81, down 3 1/4 cents; Mar 16 MGEX Wheat settled at $5.06 1/4, down 5 cents.

EU Grains Mixed, Weaker Sterling Helps Pound On The Day

22/12/15 -- EU grains closed mixed. London wheat fared better than it's French counterpart as the pound slipped to 1.35 versus the single currency - it hasn't closed lower than that level more than a few times since February. Sterling also seems to be ending 2015 on a low note against the US dollar, against which it currently looks like ending the day at it's lowest since April.

At the finish, Jan 16 London wheat was up GBP0.75/tonne at GBP112.75/tonne, Mar 16 Paris wheat was EUR0.75/tonne lower at EUR174.00/tonne, Jan 16 Paris corn was down EUR2.00/tonne at EUR158.75/tonne, whilst Feb 16 Paris rapeseed was EUR1.25/tonne lower EUR374.25/tonne.

Data showing that the UK public sector borrowed more than expected in November stung the pound, just as Germany consumer confidence came in above market expactations. Some, although certainly not all, market analysts are talking of a wind of change ahead in the currency markets in 2016 - with the euro possibly not set to remain the international forex "whipping boy" for too much longer.

That's not to say that it's position will be replaced by the pound at all, there are still plenty of pundits out there calling for a GBP/EUR exchange rate in the 1.40-1.45 region in the first half of next year. However, year-end is looming, and some players may be taking some money off the table and banking a few profits - the pound has (until recently) been in a more or less upwards trajectory against the single currency for 2 1/2 years now. Having closed below 1.15 on the last day of July 2013 it had appreciated more than 25% by the time of it's 1.44 peak in July of this year.

Sticking with currencies for a little while longer, the Russian rouble hit a fresh all-time low of 72 versus the US dollar today. Weakness in crude oil is one of the ongoing factors behind the rouble's demise, along with continued tensions/sanctions with the West. The currency has now weakened to the extent that the "floating" export duty on wheat, which was raised not too long ago to be nothing more than a token amount, has now kicked in again to something a bit more significant.

Following Argentina's recent change of leadership, Russia is now the only major international seller who currently has a wheat export tax in place, leading to calls for it's removal from various leading Russian traders and analysts.

Russia's complicated on-off export duty, which was in place at the start of the season, appeared to hinder the pace of what sales during the first part of 2015/16, before the ceiling at which more than a token level was introduced was increased a couple of months ago.

That meant that Russia's Q1 (Jul/Sep) grain exports were officially 9.78 MMT, a 15.2% decrease compared to the same period a year ago. By Dec 9, these were only down 6% versus the same period in 2014.

Of course we can never be 100% sure that what the official Russian Ministry numbers say are indeed to whole truth. Respected Russian analysts SovEcon tell the HGCA that Russia's Jul/Nov actual wheat exports were probably around 1 MMT higher than the official Ministry numbers suggest, and that final exports this season could even beat last season's record 21.6 MMT total.

Whilst Russia would therefore seem to be exporting considerable, and maybe even record or at least near to record, volumes of wheat/grains now, it also of course potentially means lower carryover at the end of the season heading into 2016/17. Whilst concerns remain over crop prospects for next season, that could shed a rather more bullish tone on things 6 months from now when we have a much clearer idea about final production prospects in 2016.

The weak rouble will also of course mean increased input costs, potentially meaning increased use of lower quality seed and reduced levels of fertiliser/agrochemicals. It needs also to be remembered though that these are some of the exact same issue being debated a year ago - and things largely seem to have turned out pretty well despite these concerns. For now all we have to go on, much as we did back then, is the usual early doors Ag Ministry forecast for grain production of or around this season's levels.

Somewhere where the alarm bells are already ringing a little louder is next door in Ukraine. French analysts Agritel, who have offices in Ukraine, and following a recent crop tour of the country say that wheat production there could fall 30% 24.55 MMT to 17.2 MMT next year.

Late summer/autumn/early winter drought cut wheat plantings, meaning that the 2016 harvested are might fall to around 4.65 million ha, down 21% decline compared to this year, and the lowest acreage in the last 10 years. They also see average yields falling to 3.70 MT/ha from 3.85 MT/ha this year.

At this stage that takes production down to 17.2 MMT in a medium case scenario, with a current best case of 18.1 MMT and a worst case of 16.4 MMT, they say. Production in 2014 was seen at around 24.55 MMT, so if the worst case scenario proves to be right then a production fall of 33% compared with this year could be on the cards.

Chicago Close - Monday

21/12/15 -- Soycomplex: Beans closed a touch lower. Weekly export sales of 1.463 MMT were fairly good, and up 7% on a week ago. They were however 36% smaller than the same week in 2014. YTD exports are 7% down on this time a year ago. Jan 16 Soybeans settled at $8.91 1/4, down 1 cent; Mar 16 Soybeans settled at $8.91 1/2, down 1 1/4 cents; Jan 16 Soybean Meal settled at $279.00, down $2.00; Jan 16 Soybean Oil settled at 30.77, up 24 pips.

Corn: The corn market closed around a couple of cents lower. Weekly export sales of 718,888 MT were pretty good and up 27% from the week before. YTD inspections are sill 22% smaller than last year however. South Koreas's MFG bought 232 TMT of optional origin corn for May/Jun delivery said to be at $182-184 C&F. Russia said that they'd exported 1.55 MMT of corn Jul 1 to Dec 16. Mar 16 Corn settled at $3.72, down 2 1/2 cents; May 16 Corn settled at $3.78, down 2 1/2 cents.

Wheat: The wheat market closed lower a across the three exchanges. Weekly export sales of 475,375 MT were in line with expectations and 8% up on a week ago. YTD inspections are still nearly 14% smaller than last year. Jordan were reported to have bought 25,000 MT of hard wheat for Jan shipment. Russia said that they'd exported 18.6 MMT of grains Jul 1 to Dec 16 - a 5% drop on a year ago, with wheat accounting for 75.8% (14.1 MMT) of that total. May 16 CBOT Wheat settled at $4.86 1/4, down 6 3/4 cents; May 16 KCBT Wheat settled at $4.84 1/4, down 8 cents; May 16 MGEX Wheat settled at $5.11 1/4, down 4 3/4 cents.

EU Grains Grind Mostly Lower

21/12/15 -- EU grains closed mixed in what already looks like being a typically uneventful and thin Christmas week.

At the close of trading, Jan 16 London wheat was down GBP0.40/tonne at GBP112.00/tonne. In Paris, Mar 16 wheat was down EUR1.50/tonne to EUR174.75/tonne, Jan 16 corn fell EUR0.50/tonne to EUR159.00/tonne and Feb 16 rapeseed rose EUR2.00/tonne to EUR375.50/tonne.

As far as wheat goes, if you forced me to put money on it right now, then mine would go on more of the same between now and Thursday - a further grind lower. We might see a change in the following holiday-shortened week between Christmas and New Year as fund money banks some profits and squares up the books a little ahead of year-end. That could see some modest late-year upside, but a direction changer it's unlikely to be.

Once we get into the New Year it may be unlikely that the wheat market might move significantly higher without the aid of some outside catalyst - and what that might be we probably don't really know what that is (if it exists at all) right now. Current "worries" over Russian/Ukraine winter grain crop health (or the lack of it), won't be anything like properly quantifiable until well into the spring.

As mentioned on numerous occasions before, we also need to keep an eye on exchange rates. Luckily, analysts seem generally be in line with what they expect the "usual suspects" to do - in the first quarter of 2016, if not at least until the second. Further forward of that, but perhaps not surprisingly, the waters muddy a little unfortunately. Just like the weather, the further forward you go the lower the degree of forecaster certainty there is when it comes to currency movements it would seem.

The current consensus indicates a strong dollar, a moderate pound and a weak-ish euro. That tentatively suggests wheat prices doing pretty much the same across the next 6 months as they have in the last, with Paris performing the best of the wheat markets - if not exactly setting the world on fire - and Chicago wheat the worst with the London market caught somewhere between the two.

The other thing that warrants keeping an eye on going forward is the old crop/new crop (and even far flung new crop 2017 too) premiums. Whilst the old crop/new crop London wheat premium is currently rather wide, I wouldn't rule out it getting even wider yet (not that means at all that Nov 17 will go up). Similar comments might also apply to Paris wheat and also comparisons the even larger premiums on offer for the 2017 harvest too.

As far as other fundamentals go, at this stage it looks like the world will plant/has already sown largely the same wheat area for the 2016 harvest as the one just passed.

The German Stats Office estimate little alteration to winter wheat plantings at 3.22 million ha, with winter barley sowings up 35 at 1.3 million ha. Various private estimates have UK wheat plantings relatively unaltered for the 2016 harvest too.

France meanwhile is expected to plant even more wheat than it did for this year's ultimate record 41 MMT soft wheat crop - an 80 year high in sown area in fact.

Strategie Grains see overall EU-28 winter wheat plantings little changed compared with 12 months ago at 24 million ha.

Ukraine said that their winter grain plantings for the 2016 harvest were 11.4% down on a year ago at 7.1 million ha, and that OSR sowings had fallen 26.5% to 650k ha. Additionally only 86% of these winter grains and 87% of winter OSR have so far emerged. Further downgrading production potential in 2016, only 67% of winter grains and 68% of winter OSR are in good to satisfactory condition.