EU Grains All End Higher For The Week

Posted by Nogger - a legend in his own mind at 10:01 | Categorized as

28/10/16 -- EU grains closed mixed, but mostly higher. Paris rapeseed closed at EUR400/tonne for the first time since April 2014.

At the close Nov 16 London wheat was down GBP0.50/tonne at GBP139.00/tonne, Dec 16 Paris wheat was EUR0.25/tonne firmer at EUR164.50/tonne, Nov 16 Paris corn was up EUR0.25/tonne at EUR167.00/tonne, Nov 16 Paris rapeseed was EUR3.50/tonne higher at EUR400.00/tonne.

For the week that puts London wheat GBP5.00/tonne firmer, with Paris wheat up EUR1.50/tonne, corn EUR7.75/tonne higher and rapeseed EUR6.00/tonne better.

In percentage terms that makes Paris corn the leader of the pack with a net 4.9% weekly gain, followed by London wheat (+3.7%), Paris rapeseed (+1.5%) and Paris wheat (+1.0%).

Corn derives benefit from a second sharply reduced EU corn crop in a row, mainly due to deficiencies in production from France. The IGC pegged EU production at only 59.3 MMT this week, down 200,000 MT from last month. Whilst that's still 1.1 MMT up on a year ago it's a far cry from the 76.2 MMT produced in 2014/15.

Rapeseed also gets support from reduced EU production again this year, as well as firm global vegoil prices and problems wrapping up the last of the Canadian canola harvest due to snow. Trade talk also suggests that newly planted winter rapeseed for the 2017 harvest has had a pretty torrid time getting established due to dryness and pest/disease issues in Europe. The outlook for production next year is therefore already one of reduced expectations.

FranceAgriMer today placed the French corn harvest at 60% complete, up from 39% a week ago but 9 points below this time last year. Output of only around 12 MMT is expected from Europe's largest producer this year due to drought.

French winter wheat planting for next year's harvest is said to be 60% complete versus 72% a year ago. Winter barley is 74% planted against 88% this time last year.

Strength in London wheat futures this week "can be partly attributed to current sentiment about UK feed wheat supplies this season, the approaching end of the UK Nov-16 futures contract and strong export demand for EU wheat," said the HGCA. Despite sterling remaining weak, the pound is little changed tonight versus last Friday.

Nov 16 London wheat is now 9.4% higher than at the end of last month. The pound has moved 6% lower versus the US dollar and is "only" down 4.4% compared to the euro during this time.

The outlook for further pound depreciation does though suggest that more upside for London wheat could yet be on the cards, despite prices now hovering around their best levels since June 2014.

Ukraine said that their 2016 harvest was 87% complete at 53.7 MMT. Corn harvesting is 59% done at 14.7 MMT. Winter wheat plantings for the 2017 harvest are said to be 90% complete. Cold weather has now hit the country, advancing dormancy and slowing crop development.

Russia's 2016 grain harvest is said to be 94.8% complete at 119.5 MMT. Wheat is 98.1% harvested at 75.8 MMT. Winter grains are planted on 16.8 million ha (96.8% of the government forecast) versus 15.7 million ha this time a year ago.