EU Grains Mostly Higher On Crop Downgrades

07/07/16 -- EU grains finished the day mostly higher as local weather worries and crop downgrades outweighed bumper prospects further east.

At the close Jul 16 London wheat was unchanged at GBP111.75/tonne. Sep 16 Paris wheat closed EUR2.00/tonne firmer at EUR155.75/tonne, both Aug 16 corn was also up EUR2.00/tonne at EUR169.50/tonne and Aug 16 rapeseed was unchanged at EUR350.00/tonne respectively.

Strategie Grains yesterday reduced their forecast for the French soft wheat crop by 2 MMT to 36.5 MMT, and ODA today went even lower at 35.0 MMT (2015: 40.8 MMT).

The IGC forecast the UK wheat crop down 9% at 14.9 MMT versus 16.4 MMT a year ago.

The German Farmers Association estimated production there at 25.0 MMT this week, some 4.4% lower than a year ago.

There seem to be no such problems in Russia, where the 2016 harvest has already brought in 6.4 MMT of wheat, with yields up 21% at 4.75 MT/ha.

The barley harvest in Ukraine is progressing quickly, with yields here also sharply higher than a year ago and some port congestion is already starting to build, according to Agritel.

The say that Ukraine barley prices at the ports are down to $124/tonne from $140/tonne a fortnight ago.

Israeli buyers said that they'd booked 120,000 MT of corn, 85,000 MT of feed wheat and 15,000 MT of feed barley in their tender. Optional origin was specified, but Black Sea material is likely to be what they get.

The Russian Ag Min said that the issue of export duties on wheat will be returned to in the autumn after the harvest, and that they will not be removed just yet. That may keep sellers there out of the market for a wee while, although any void is likely to be filled by Ukraine/Romania/Bulgaria and the like.

The FAO raised their view on world wheat production from 724 MMT to 732 MMT, increasing ending stocks by 1 MMT to a 15-year high of 217 MMT.