EU Grains Markets Now Looking Ahead To 2016/17 Production

18/04/16 -- EU grains mixed, but mostly steadier to start the new week.

At the finish, front month May 16 London wheat was up GBP1.10/tonne at GBP105.15/tonne, May 16 Paris wheat was EUR0.25/tonne lower at EUR151.00/tonne, June corn rose EUR0.25/tonne to EUR155.75/tonne and rapeseed closed EUR3.50/tonne higher at EUR372.00/tonne.

A Bloomberg survey forecast this year's coming EU28 soft what crop at 145.8 MMT, from within a range of 140.77-153.00 MMT, and all wheat output at 154.9 MMT, from within a range of 15.68-161.70 MMT (USDA all wheat 160.00 MMT in 2015/16). In the case of all wheat that's a 3.2% fall versus last year.

As far as a nation-by-nation breakdown goes, the average guess for French soft wheat was 39.4 MMT, with Germany at 26.0 MMT and the UK at 15.3 MMT.

There's a long way to go just yet, but for now those figures look about right, although under pressure I'd tend to favour higher numbers than lower ones right at this moment in time.

There's much debate too over crop production potential in Ukraine and Russia. Agrtel today released their latest forecasts, calling for Ukraine wheat in 2016 at 19.3 MMT, up from 17.2-18.1 MMT previously, although down 27% on a year ago.

For Russia they are now predicting a wheat crop of 62.3 MMT, up from 61 MMT in 2015 from the USDA.

Russian seaports shipped out 456 TMT of grains last week, including 330 TMT of wheat, 52 TMT of corn and 69 TMT of barley. Calendar year to date exports are 9.58 MMT, of which wheat accounts for 5,38 MMT. Full 2015/6 season to date exports are 32.5 MMT, of which wheat accounts for 21.44 MMT.

Ukraine's seaports meanwhile shipped out 662 TMT of grain last week, including 235 TMT of wheat 425 TMT of corn and 3 TMT of barley.

The picture being painted then continues to be one of another strong production year in 2016/17, output mighty be down,, but not by much. Large carryover stocks from 2015/16 still means that we will begin the new season with a larger disposable surplus than the last.