EU Grains Mixed In Need Of Direction

Posted by Nogger - a legend in his own mind at 10:14 | Categorized as

05/07/16 -- EU grains closed mixed with thinly-traded Jul 16 London wheat closing up GBP0.55/tonne at GBP111.80/tonne. Sep 16 Paris wheat traded up EUR0.25/tonne at EUR154.25/tonne, Aug corn was EUR1.75/tonne lower at EUR168.0015/tonne and Aug 16 Paris rapeseed was EUR3.00/tonne lower at EUR354.00/tonne.

US markets were closed for much of the day, leaving EU grains devoid of some much-needed direction.

The German Farmers Association (DBV) estimated the grain crop there this year in line with the 5-year average of 47.2 MMT at 47-48 MMT, although down a little on last year's 48.9 MMT.

They said that around 200k ha of land was badly affected by excessive rain and hail this year, around 3 times the norm. Winter OSR production will probably be around 5 MMT, they added.

Earlier, Agritel said that early barley yields and specific weights in France confirm post-harvest nerves and are disappointing

Severe drought in Morocco means that their 2016 harvest is going to be very poor, with wheat production of only 2.8 MMT versus a previous estimate of 3.7 MMT and 8.0 MMT last year, say the USDA's FAS.

Barley production is estimated at just 0.9 MMT versus 1.0 MMT previously and 3.5 MMT a year ago.

"All this could lead to Morocco increasing its imports of grains including barley and wheat. This therefore could be an opportunity for the UK to increase its exports to the country," the HGCA noted.

"Morocco is already one of the UK’s target export market for wheat with exports so far 2015/16," they added.

The recent demise of sterling following the Brexit vote should help competitiveness, although it's starting to look s if France may have a lot more feed barley, and possibly wheat too, than normal.

Meanwhile, "the average UK feed wheat ex-farm price for the whole of 2015/16, which ended last week, was at £104.9/t, according to AHDB’s Corn Returns. This is the lowest average price since 2009/10 and reflects the ample global supplies of wheat this season which has been depressing prices," said the HGCA.

Israeli private buyers are tendering for 120,000 MT of corn, 115,000 MT of feed wheat and 15,000 MT of feed barley, all of optional origin.

Egypt are said to have finally agreed to take wheat with an ergot tolerance of 0.05%, seemingly opening the doors for new tenders there soon.