EU Grains Decline Ahead Of Bearish USDA Report
10/02/15 -- EU grains closed mostly lower heading into the February USDA WASDE report.
At the close, Mar 15 London wheat was GBP0.75/tonne weaker at GBP122.40/tonne, Mar 15 Paris wheat was EUR2.25/tonne lower at EUR185.00/tonne, Mar 15 Paris corn was down EUR1.00/tonne at EUR154.50/tonne and May 15 Paris rapeseed fell EUR1.00/tonne to EUR356.50/tonne.
ABARES increased their forecasts for Australian wheat, barley and canola production, although output of all three is still significantly lower than a year ago. They upped their estimate for wheat from 23.22 MMT to 23.61 MMT, which is 12% down on last year. Canola was increased from 3.32 MMT to 3.41 MMT, a 10% fall compared with a year ago, and barley production was pegged at 8 MMT, an 18% decline versus last year.
Russia only managed to pick up less than a thousand tonnes of grain in their bi-weekly intervention purchase round - one of the poorest results of the season so far. That came just 24 hours after the Ag Ministry said that raising the prices on offer would be inappropriate.
They've only bought less than 350 TMT of their stated aim to purchase 2.3-3.0 MMT for the state intervention fund since buying began in late September.
The Ukraine Ag Ministry said that 82% of winter grains in the country are in good to satisfactory condition, and 18% are weak/thinned, unchanged from their previous estimates.
APK Inform said that in a survey that they conducted only two thirds of Ukraine farmers have at least 80% of their crop protections products bought, and less than that (57%) have at least 80% of their fertiliser purchased. Prices for both are sharply higher this year following the demise of the Ukraine currency.
A separate survey yesterday said that 45% of Ukraine farmers expect to cut their fertiliser usage this year after prices rose between 35-100% in the last 6 months.
The USDA's FAS in Ukraine estimated wheat exports this year at 10.8 MMT versus 9.8 MMT a year ago, with barley shipments at 4.2 MMT (2.5 MMT last season) and corn exports at 20 MMT (around unchanged). By the end of December Ukraine's wheat exports were 8.1 MMT, with those for barley at 3.7 MMT and corn at 6.0 MMT.
The French Farm Ministry estimated their winter soft wheat area at 5.13 million hectares versus a previous estimate of 5.10 million and up 3.1% from a year ago.
They see the French winter rapeseed area at 1.5 million ha, unchanged from previous their estimate and down 0.6% from a year ago.
Late in the day the USDA increased their forecast for the 2014/15 world wheat crop from 723.4 MMT to a new record 725 MMT. Ending stocks were up by almost 2 MMT to 197.8 MMT. Production increases came from Argentina, Kazakhstan, the EU, Turkey, and Ukraine.
They also raised EU wheat exports by 1 MMT to a second highest ever 31 MMT, leaving their outlook for Russia and Ukraine unchanged at 20 MMT and 11 MMT respectively.