EU Grains Mostly Higher

Posted by Nogger - a legend in his own mind at 09:41 | Categorized as

01/09/16 -- EU grains closed mostly higher, although London wheat was lower save for a nominal gain in nearby Nov 16.

The day ended with Nov 16 London wheat up 5 pence at GBP123.00/tonne, Sep 16 Paris wheat was up EUR2.75/tonne at EUR157.50/tonne, Nov 16 corn rose EUR1.25/tonne to EUR161.00/tonne and Nov 16 Paris rapeseed gained EUR0.75/tonne to EUR373.50/tonne.

This was the first, albeit very modest, up day for nearby London wheat since Aug 19. The contract has lost GBP9.00/tonne, or 6.8%, since then.

FranceAgriMer cut the proportion of the French corn crop rated good to very good by 3 percentage points to 60% today. Harvesting of that crop has yet to begin. Production is placed around 13.0-13.5 MMT, similar to a year ago.

Bulgaria said that it had brought in a record 5 MMT wheat crop this year, up 8.7% from 4.6 MMT a year ago. It will be an aggressive early season exporter.

Russia said that it plans to reset the current export duty on wheat to zero starting Sep 15, now that it is confident of another bumper production year that far outstrips domestic needs. This year's wheat harvest is currently around 70% done. A crop in excess of 75 MMT could be on the cards, according to Agritel.

Reuters reported that Germany's wheat harvest is more or less over and that production had not been as bad as feared (24.6 MMT say the Ag Minsitry). They've managed to fill some of the EU void left by a disastrous French harvest into North Africa by exporting an estimated 125,000 MT to Algeria in August along with 65,000 MT to Iran and 25,000 MT to Morocco.

Brussels announced 522,825 MT worth of soft wheat export licences, taking the season to date total to 4.54 MMT so far.

The demise of rapeseed as a crop continues. Agritel say that current prices should be supported by limited availability as well as difficulties sowing new crop, especially in France. This could further impact negatively on EU production for 2017.

The neonicotinoid ban and penalties associated with high levels of erucic acid in this year's crop already have growers falling out of love with the crop.

Current relatively low prices, ignoring the rapeseed S&D fundamentals and instead following the global soybean market lower, are further exacerbating the situation.