EU Grains Mixed, London Wheat Weakest Leg

Posted by Nogger - a legend in his own mind at 08:59 | Categorized as

10/11/16 -- EU grains closed mixed, with London wheat the weakest leg for a change as sterling found a sudden burst of strength.

At the close Nov 16 London wheat was down GBP0.40/tonne at GBP137.00/tonne, Dec 16 Paris wheat was EUR0.75/tonne higher at EUR161.50/tonne, Jan 17 Paris corn rose EUR0.50tonne to EUR162.25/tonne, Feb 17 Paris rapeseed was EUR3.00/tonne firmer at EUR393.00/tonne.

The market is now thinking that the pound's downside might have been overdone in the post-Brexit vote aftermath. Donald Trump's shock US election victory could now mean that the Bank of England will start raising UK interest rates sooner, and maybe higher, than previously anticipated if and when Trump puts some of his pre-election promises into action.

That could be bearish for London wheat, much of who's gains (from an early March low of under GBP100/tonne), have been directly attributed to sterling weakness rather than fundamental wheat market strength.

In other news, FranceAgriMer said that this year's French corn harvest could be the lowest since 1990. They lowered their production forecast to 11.805 MMT, down from 12.197 MMT previously and 9.6% down versus last year - and that was hardly a vintage crop either.

They said that the 2016 French corn harvest has now caught up pace with "normal" at 89% complete versus 79% a week ago and 90% this time last year.

French winter wheat planting has also advanced to 90% complete versus 78% a week ago and 93% a year ago. Winter barley is 97% sown (89% last week and 98% a year ago).

They increased the proportion of the French winter wheat crop rated good to very good by one percentage point to 95% (versus 97% a year ago). Winter barley good to very good was placed at 94% versus 97% a year ago.

The French analysts forecast the nation's soft wheat exports to fellow EU destinations at 6.3 MMT versus 6.42 MMT previously and 19% down on a year ago. Exports to non-EU homes were placed at 4.7 MMT, unchanged from last month but still 63% lower than in 2015/16.

Barley exports to EU homes were also downgraded to 2.85 MMT from 3.00 MMT previously and 3.03 MMT in 2015/16. Corn exports were also tweaked a little lower (5.14 MMT versus 5.16 MMT previously and 6.09 MMT last season).

Russia said that their 2016 net grain harvest had now reached 121.1 MMT off 95.5% of the planted area. That included 75.8 MMT of wheat (98.1% harvested), 19.1 MMT of barley (97%) and 10.9 MMT of corn (66.5%).

Winter plantings for 2017 are complete on 17.2 million ha (99% of the government target), up from only 15.8 million ha this time a year ago.