EU Rapeseed Marches On To New Highs

19/10/16 -- EU grains closed mostly lower, with the exception of rapeseed which marched on to new highs.

The day ended with Nov 16 London wheat down GBP1.25/tonne at GBP134.00/tonne, Dec 16 Paris wheat was EUR1.00/tonne lower at EUR162.75/tonne, Nov 16 corn was unchanged at EUR159.25/tonne and Nov 16 rapeseed was up EUR1.75/tonne to EUR393.75tonne - a new highest front month close since July 2015.

Rapeseed is seemingly setting it's sights on a test of EUR400/tonne, a level it hasn't closed above since April 2014.

A report on Reuters suggested that the French rapeseed area might fall 7% this year, Oil World estimate a 5-10% decline. Using even the lowest (5%) figure would represent the smallest area since 2012, say the HGCA.

The harvested area could be much lower considering the reports around of poor emergence in newly planted winter OSR.

The Reuters report estimates German rapeseed plantings unchanged and the UK area at the lowest in 7 years - 579k ha. Similar comments re emergence/establishment apply here too.

"Furthermore, the dry weather has caused weaker crop conditions in many parts of France, western Germany and Poland. This could put the plants at risk from frost and pest damage," said the HGCA.

FranceAgriMer said that French soft wheat exports to non-EU destinations are down by a third for the first three months of the new season (Jul/Sep) following quality (and volume) problems with their crop this year. Exports to top home Algeria are 30% lower. Total export potential in 2016/17 is only forecast at 11.1 MMT versus 20.4 MMT a year ago, of which non-EU homes will take just 4.7 MMT compared to 12.6 MMT in 2015/16.

Ukraine said that their 2016 grain harvest is 82% done at 48.7 MMT. Corn harvesting is 41% complete at 9.85 MMT. Winter grains have been planted on 5.42 million ha (74% of plan), down 322k ha on a year ago. Dryness remains an issue for emergence. Winter wheat plantings are 79% complete at 4.89m ha, winter OSR sowings (769k ha) are finished.

Russia said that it's grain harvest was 93.4% complete at 116.3 MMT. Wheat accounts for 75.6 MMT of that (97.9% complete). Corn harvesting is 42.9% done at 6.8 MMT. Winter planting works are finished on 15.7 million ha, or 90.2% of plan. Dryness in the European part of Russia is also a problem for emergence.

Jordan were said to have bought 50,000 MT of optional origin feed barley at $180.90/tonne C&F for March shipment in a tender.

Egypt's GASC are back in the market for wheat, tendering for Nov 21-30 shipment with the results expected tomorrow. Romania and Russia won last week's business.