Nov 15 London Wheat Hits New All-Time Low, French Crop Seen At Record High This Year

05/08/15 -- EU grains finished mostly higher, French wheat reversed early losses despite forecasts for a record crop there this year. Rapeseed and corn gained on ideas that EU production this year would be sharply lower.

At the close Nov 15 London wheat was unchanged at GBP118.00/tonne, Sep 15 Paris wheat was EUR0.50/tonne firmer at EUR178.75tonne, Aug 15 Paris corn was up EUR2.00/tonne to EUR177.00/tonne, whilst Nov 15 Paris rapeseed was EUR2.25/tonne higher at EUR381.00/tonne.

The EU Commission this week estimated the rapeseed crop here this year at 20.7 MMT, down almost 15% on a year ago.

A Bloomberg report said that this year's French corn crop was "simply fried" with crops in many areas only half the height that they would normally be.

A survey of theirs put the French corn crop down 24% at 14.1 MMT - the lowest since 2003.

The Italian corn crop was seen down 23% at 7.1 MMT, and production in Romania expected to drop 19% to 9.8 MMT.

The overall EU corn crop was predicted to fall 19% to 62.8 MMT, although the lowest hat in the ring had production below 60 MMT versus 77.8 MMT a year ago.

That could lean friendly for feed wheat, although you wouldn't know it from today's price action, Nov 15 London wheat set a new lifetime contract low of GBP116.80/tonne today, and even the Nov 16 contract came within GBP1.00/tonne of it's lowest ever.

The gap between the two is now more than GBP10/tonne, and incidentally there's a further GBP6.35/tonne on offer to carry your about to be harvested 2015 wheat crop all the way to 2017!

The French wheat market initially traded lower on harvest pressure, with Agritel saying that the wheat harvest there is progressing quickly and should be all done by the weekend.

They forecast the 2015 French soft wheat crop at a record 38.9 MMT, and ODA went even higher at 39.4 MMT. The crop appears to have escaped May/June heat/dryness relatively unscathed. Plantings this year were the largest since 1936, contributing to the anticipated record output.

Egypt was inundated with cheap offers in it's latest wheat tender, finally booking two cargoes of Russian material at less than $199/tonne including freight. That was around $6/tonne less than their previous purchase a fortnight ago, and said the be the cheapest level in years.

Russian offers were probably helped by the rouble being sharply lower than it was at the time of the last tender.

The 2015 grain harvest there is now 29.3% complete on 13.7 million ha producing a crop of 43.7 MMT to date. Yields continue to fall as the harvest progresses into some of the less productive areas away from the south of the country. Nationally these now average 3.19 MT/ha, down 4.5% on a year ago.

Average yields in the Central region, where the harvest is 30.4% complete, are down 18.3%, the Volga region sees them down 16.4% and in the Far Eastern region where the harvest is less than 10% done they're down 27.5%.

As these areas progress I'd expect the national average to continue to fall away compared to last year.

Meanwhile, there are now media reports emerging of the worst locust plague in 30 years hitting some farmland in the south of Russia. The wheat harvest is probably mostly wrapped up here, but the corn crop is still out there being eaten.

Ukraine are busy finishing off the early grain harvest and exporting as fast as they can, as per any other year really. If it isn't nailed down, put it on a ship as quickly as possible and turn it into dollars is their typical philosophy.

The Ukraine Ag Ministry said that the country has now exported 2.624 MMT of grains since the new season began little more than a month ago, including 784 TMT of wheat, 992 TMT of corn and 846 TMT of barley.