EU Grains Off Highs

Posted by Nogger - a legend in his own mind at 09:54 | Categorized as

25/07/16 -- EU wheat closed mixed - and well off session highs - which were set early in the day following more bad news for the French wheat crop.

At the close Nov 16 London wheat was down GBP0.40/tonne at GBP125.675/tonne, Sep 16 Paris wheat fell EUR3.50/tonne to EUR170.50/tonne, Aug Paris corn was down EUR0.75/tonne at EUR170.75/tonne and Aug 16 Paris rapeseed was EUR0.25/tonne higher at EUR358.00/tonne.

Nov 16 London wheat had earlier touched GBP128.50 - it's best level since early November. Sep 16 Paris wheat meanwhile hit EUR177.25/tonne - a level not seen since January.

Having downgraded the French wheat crop to 32 MMT from 35 MMT just last week, ODA went one further today calling the crop at 30 MMT or less - a 40-year low.

They are now the most bearish of the private estimates (Agritel go 32 MMT) but not by an outrageous amount. Production last year was almost 41 MMT, so despite a larger than normal carryover into 2016/17 French exports are clearly going to be hit quite hard, especially in the second half of the season one would imagine.

Production in Germany is forecast 19% lower by Agritel at 26 MMT, and in Poland it is seen 10% down at 10.7 MMT. The UK jury is still out, although output is definitely expected to drop here too.

Russia's wheat harvest has no such troubles foreseen, and is complete on 7.2 million ha for a crop of 29.8 MMT so far. The barley harvest is complete on 1.1 millin ha for a crop of 3.8 MMT to date.

Their grain exports via seaports picked up last week to 308,100 MT from 204,400 MT the previous week. Wheat accounted for 227,100 MT of that total.

By contrast Ukraine's seaport exports fell to 149,500 MT from 423,500 MT), including 18,900 MT of wheat, 12,300 MT of corn and 115,200 MT of barley.

Kazakhstan will produce 13 MMT of wheat this year, down from 13.75 MMT a year ago as producers there diversify into other crops, say the Ag Min there.

Morocco tendered for 133,000 MT of soft wheat. Iran were said to have bought 350,000 MT of EU/Baltic origin wheat for Oct/Nov shipment.