EU Grains Retreat From Highs

01/11/16 -- EU grains closed mostly lower, with London wheat retreating from yesterday's best close since June 2014. Hands up all those that said they were going to sell when it hit GBP140/tonne but didn't!

The day ended with Nov 16 London wheat down GBP1.10/tonne at GBP138.90/tonne, Dec 16 Paris wheat was EUR02.75/tonne lower at EUR163.00/tonne, Feb 17 Paris rapeseed ended EUR5.75/tonne weaker at EUR393.00/tonne and Nov 17 Paris corn was down EUR0.75/tonne at EUR166.25/tonne.

The EU Commission raised their estimates for this year's EU soft wheat and barley crops, pegging soft wheat up 400,000 MT from a month ago to 134.6 MMT, and increasing barley output by a similar amount to 60.0 MMT. For soft wheat that represents a 16.7 MMT, or 11% , drop versus last year. For barley it's a more modest decline of 1.4 MMT, or 2.2%.

For EU corn production they were unchanged from a month ago at 59.7 MMT (versus 59.1 MMT in 2015). They forecast total 2016/17 grain exports at 36.6 MMT, including 25.0 MMT of soft wheat, 8.0 MMT of barley and 2.0 MMT of corn.

Worries remain about crop production in Canada and Australia. CBH lowered their estimate for the Western Australian wheat crop from 8.4 MMT to 7.8 MMT (and down sharply from the government's official figure of 10.5 MMT). Meanwhile around 20% of this year's spring wheat and canola crops in Saskatchewan are still out in the field unharvested.

There are no such problems in Russia where the harvest is now 95% done at 120 MMT in bunker weight. That includes 98.1% of this year's wheat crop (75.8 MMT) and 97% of this year's barley (19.1 MMT). The ongoing corn harvest is 60.2% complete at 9.7 MMT.

Winter plantings for next year are well advanced at 97.3% complete on 16.9 million ha. That's 1.1 million ha more than at this time last year.

Ukraine's harvest is also moving along nicely at 89% complete at 54.86 MMT. That includes 63% of this year's corn harvest for a crop of 15.84 MMT so far.

Winter wheat planting in Ukraine is said to be 91% complete on 5.66 million ha, with 75% of the winter barley crop now in the ground on 772k ha.

Kazakhstan said that their 2016 grain harvest was now officially over at 23.68 MMT in bunker weight. Wheat production this year amounts to 17.8 MMT (14.6 MMT a year ago) and barley output adds another 3.3 MMT (2.9 MMT in 2015).

Algeria are tendering fro 50,000 MT of optional origin hard wheat for Nov/Dec shipment. They frequently buy much more than they tender for.