EU Grains Mostly Lower To Start The Week

26/09/16 -- EU grains closed mostly lower to start the week. Fresh news was relatively scarce.

At the close Nov 16 London wheat was down GBP1.05/tonne at GBP125.65/tonne, Dec 16 Paris wheat was EUR1.25/tonne weaker to EUR160.00/tonne, Nov 16 Paris corn was down EUR2.25/tonne at EUR160.50/tonne, Nov 16 Paris rapeseed was EUR2.00/tonne lower at EUR373.75/tonne.

Rapeseed remains range-bound, having only closed outside the EUR370-380/tonne area once since Aug 12. That seems more heavily influenced by palm oil and soybean prices than rapeseed S&D fundamentals which are tight.

Early French corn yields are "confirming a disappointing season" and the harvest there might now struggle to reach 12 MMT, said Agritel. That would be more than 1 MMT below last year.

Spain on the other hand is expecting a total grain harvest 28% higher than a year ago at 23.82 MMT, according to the Spanish Co-operatives Association. They see wheat output (excluding durum) at 6.93 MMT versus 5.24 MMT a year ago and are forecasting a barley crop of 9.52 MMT (6.85 MMT in 2015). Corn production will however be lower due to a reduction in acreage (3,73 MMT from 3.98 MMT a year ago).

The Russian Ag Ministry increased their forecast for wheat production there this year to 71 MMT, estimating a total clean weight grain crop of 113 MMT which easily beats the post-Soviet era record of 108 MMT set in 2008. Planting for the 2017 harvest is already nearly 60% complete.

Russian exports have thus far been slow though at 7.83 MMT to Sep 21, a 9% decline versus the same period in 2015/16. How much of this is due to the now rescinded wheat export tax, or a lack of quality, remains to be seen. Certainly some of this could be attributed to Egypt's recent shenanigans re ergot.

Russia's exports via seaports did pick up last week, at 747.4 TMT versus a poor 229.4 TMT the previous week. Some 595.3 TMT of that was wheat.

Ukraine's exports continue unabated, with their seaports shipping out 648.4 TMT of grains last week, according to APK Inform. That's up from 596.1 TMT the previous week and was mostly (575.9 TMT) wheat. Top home was Morocco 145 TMT followed by Saudi Arabia (59.9 TMT).

High temperatures will cut this year's Romanian corn crop to "no more than" 8.75 MMT, according to one analyst. Production last year was 12 MMT.