Paris Rapeseed And London Wheat Hit New Highs

17/10/16 -- EU grains closed mostly higher on the day, with London wheat and Paris rapeseed pressing onto new highs.

At the close Nov 16 London wheat was up GBP1.70/tonne at GBP136.00/tonne, Dec 16 Paris wheat was EUR0.50/tonne higher to EUR164.25/tonne, Nov 16 Paris corn was EUR0.75/tonne easier at EUR158.75/tonne, Nov 16 Paris rapeseed was EUR3.00/tonne higher at EUR391.50/tonne.

For rapeseed this was the highest front month close since July 2015 on lower EU production, firmer palm oil markets and a stalled Canadian harvest due to early snow.

Anecdotal reports from the UK suggest a failure of emergence in winter rapeseed sown for the 2017 harvest, with crops already being ripped up and replanted in some cases.

The NFU already warned last week that plantings for 2017 could be reduced again this year due to the neonicotinoid ban and general producer dissatisfaction with growing the crop. Yields were particularly disappointing this year you will recall.

Meanwhile, London wheat did even better, closing at the best levels on a front month since Dec 2014 on the outlook for continued sterling weakness. That's what the Sunday papers' financial sections were full of, and if they are to be believed then parity with the euro is little more than a formality in the coming months.

There's some decent wheat demand out there too. With Saudi Arabia apparently booking 610 TMT of  mainly German, Polish and Latvian 12.5% hard wheat for Dec/Jan delivery in their latest tender.

Algeria were said to have booked 480 TMT of optional origin wheat too, the majority of which is expected to be EU material. So EU exports aren't slowing up too appreciably just yet.

Note that whilst EU soft wheat exports are currently 17% up on year ago levels, the USDA predicts them to fall 28% year-on-year. If they don't, then ending stocks would tighten further from the already forecast 25% to 10.5 MMT.

In other news, Kazakhstan said that their harvest was 99.5% done at 23.44 MMT (versus 20 MMT a year ago) in bunker weight.

APK Inform said that Ukraine;s seaports exported 506 TMT of grains last week, down from 549.9 TMT the previous week, including 244.1 TMT of wheat, 135.4 TMT of barley and 126.5 TMT of corn.

Russian seaports shipped out 637.4 TMT of grains, up from only 325.9 TMT the previous week. That included 526.8 TMT of wheat, 3 TMT of barley and 101.5 TMT of corn.