EU Grains March Higher - London Wheat At New Highs

27/10/16 -- EU grains closed mostly higher, with nearby Nov 16 London wheat setting a fresh more than 2-year high. The pound was little changed despite news that the UK economy grew by 0.5% in Jul/Sep (the first quarter since the Brexit vote) versus analysts forecasts of only a 0.3% increase.

The day ended with Nov 16 London wheat up GBP1.15/tonne at GBP139.50/tonne, Dec 16 Paris wheat was EUR0.75/tonne higher at EUR164.25/tonne, Nov 16 corn was up EUR2.25/tonne at EUR166.75/tonne and Nov 16 rapeseed ended EUR0.25/tonne firmer at EUR396.50/tonne.

The International Grains Council trimmed back their forecast for the size of this year's EU all wheat crop by 300,000 MT to 143.3 MMT (USDA 143.2 MMT). Usage was increased from 126.6 MMT to 128.3 MMT and ending stocks lowered from 11.6 MMT to 10.8 MMT.

On a global level though production was raised 1 MMT to 748 MMT (USDA 744.4 MMT), including a 1 MMT each hike for Russia and Kazakhstan. World ending stocks were increased 2 MMT to 233 MMT (USDA 248.4 MMT).

The EU-28 corn crop was forecast at 59.3 MMT, down 200,000 MT from a month ago (USDA 60.3 MMT).

CBH lowered their forecast for the Western Australia state grain harvest from 15-17 MMT to 13-14 MMT due to more extensive frost damage than previously expected.

FranceAgriMer said that only 20% of this year's French wheat harvest makes the grade of Premium (A1) or Superior (A2) wheat.

Brussels announced that they'd issued only 220 TMT worth of soft wheat export licences this past week. The season to date total of 7.74 MMT still beats year ago levels by nearly 12% but that percentage figure is falling by the week.

Cumulative EU-28 corn import licences stand at 2.51 MMT versus 2.89 MMT a year ago.

A report in Farmers Weekly suggested that 9% of UK rapeseed crops had failed due to drought, and a further 7% to flea beetle damage. Similar problems exist on the Continent.

Bulgaria said that they'd doubled their wheat exports to 1.73 MMT so far this season, with 74% of those going to fellow EU destinations.

Kazakhstan said that their grain harvest is just about over at 23.6 MMT, up 3.9 MMT on a year ago.

Russia placed their grain harvest at 94.7% complete at 119.3 MMT in bunker weight. Wheat makes up 75.8 MMT of that total (98.1% harvested).

Rusagrotrans cut their forecast for Russia's October grain exports from 3.7 MMT to 3.2 MMT (versus 3.5 MMT a year ago and 3.9 MMT in September). Adverse weather conditions, a shortage of high quality wheat and the firmer rouble were all cited as reasons behind the move.