EU Grains Tumble Following Bearish USDA Report
11/09/14 -- EU grains closed lower, helped on their way by a bearish World Supply And Demand Report from the USDA.
The day ended with Nov 14 London wheat down GBP3.00/tonne to GBP114.00/tonne, Nov 14 Paris wheat was EUR3.25/tonne lower at EUR164.00/tonne, Nov 14 Paris corn was down EUR4.00/tonne EUR138.75/tonne and Nov 14 Paris rapeseed was EUR2.00/tonne easier at EUR321.25/tonne.
The USDA raised their global wheat production estimate by almost 4 MMT to a record near 720 MMT, largely due to a 3 MMT hike for the EU to just shy of 151 MMT, close to the all time high set in 2008/09. Ukraine's crop was also raised 2 MMT to 24 MMT.
World wheat ending stocks in 2014/15 were raised from the near 193 MMT forecast last month to nearly 196.4 MMT, which was more than the 193.75 MMT expected.
"Russia’s wheat and barley exports are both projected at record levels. Corn exports are also expected to remain strong, although down from last year’s record," they said.
All four of Europe's largest wheat producing nations all saw their production estimates rise.
The French crop is now estimated at 39.1 MMT versus 38.7 MMT a month ago and last year's 38.5 MMT. Germany's crop was increased to 26.15 MMT from 25.6 MMT, the UK's was upped to 16.25 MMT from the 15.4 MMT forecast a month ago and Poland's wheat crop was now estimated at 10.25 MMT versus 9.6 MMT in August.
The EU corn crop was also increased to 68.35 MMT from 67.05 MMT a month ago and 64.19 MMT last year. The EU barley crop was raised from 56.2 MMT to 56.98 MMT, with production in the UK increased from 5.9 MMT to 6.15 MMT.
Meanwhile the EU rapeseed crop was forecast at 23.40 MMT versus 22.65 MMT a month ago and 21.1 MMT last year.
On the export front, the EU is now seen shipping out 26 MMT of wheat in 2014/15, up 1 MMT from a month ago, although still down almost 6 MMT versus last season.
Wheat ending stocks in Europe are now forecast at 15.1 MMT versus a little under 13 MMT a month ago and 10.2 MMT at the end of last season. These would be the largest since 2009/10.
Algeria's Ag Ministry estimated their 2014 grain crop at 3.4 MMT versus 4.9 MMT last year. The USDA raised their forecast for Algeria's wheat imports from 6 MMT to 7 MMT, although that's still a little under the 7.5 MMT that they bought in 2013/14.
"Weather data confirms that dryness occurred in eastern Algeria during the sensitive reproductive stage for wheat. While the period of dryness was rather brief, it occurred when the crops were flowering and at their most moisture-dependent phase," said the USDA.