EU Wheat Higher On More Crop Downgrades
11/08/16 -- EU grains closed mostly firmer, with London wheat marching on to new highs.
The day ended with benchmark Nov 16 GBP1.40/tonne higher at GBP131.40/tonne. Sep 16 Paris wheat traded up EUR1.00/tonne at EUR167.75/tonne, Aug corn was EUR1.00/tonne higher at EUR167.00/tonne and Nov 16 Paris rapeseed was EUR0.25/tonne lower at EUR369.75/tonne.
Nov 16 London wheat closed at the highest level for a front month since Jul 9, 2015, and new crop Nov 17 closed at it's best levels since last October.
The pound finishing at it's worst levels against the euro since Aug 2013 was certainly a contributory factor, as well as the constant downgrading of the French crop and a bleak outlook for 2016/17 wheat exports from them.
The weak sterling, triggered by the Brexit vote, helped UK wheat and barley exports in 2015/16 exceed Defra expectations, noted the HGCA.
This was due to a late surge in sales - wheat exports in June were 276 TMT, a 19-year high for the month, and barley exports were 105 TMT.
Total season shipments finished up at 1.99 MMT for barley and 2.85 MMT for wheat, according to Defra.
Sticking with them, they said that the English wheat planted area for the 2016 harvest was 1.699 million ha, slightly above the 1.693 harvested in 2015. Barley area jumped from 748k ha to 798k ha. The rapeseed area fell more than 10% to 546k ha.
In Europe, Strategie Grains cut their latest estimate for the soft wheat crop by 7.7 MMT to 137.9 MMT, mainly due to losses in France where production was pegged at 29.9 MMT, down 6.0 MMT from last month and 11.1 MMT on last year.
They also took a serious slice off their prediction for EU soft wheat exports in 2016/17, down 4.3 MMT to 24.7 MMT.
Separately CRM AgriCommodities pegged French production at 28-29 MMT, and the German crop at 22.5-23.0 MMT.
For the UK where the harvest is only just getting going, CRM go 14.5-14.7 MMT, with Strategie Grains slightly higher at 14.8 MMT.
