EU Grains Rise As EU Commission Cuts Production Forecasts

Posted by Nogger - a legend in his own mind at 09:20 | Categorized as

11/07/16 -- EU grains finished mostly steadier, but off session highs. London wheat got support from continued sterling weakness in wake of the Brexit vote and subsequent political disarray.

The day ended with Jul 16 London unchanged at GBP111.75/tonne, Sep 16 Paris wheat was up EUR2.00/tonne at EUR161.00/tonne, Aug corn was up EUR0.75/tonne lower at EUR171.75/tonne and Aug 16 rapeseed rose EUR1.75/tonne to EUR354.25/tonne.

The EU Commission cut their forecast for the EU-28 soft wheat crop from 145.1 MMT To 144.6 MMT. They also reduced the size of this year's corn crop from 65.8 MMT To 65.2 MMT and lowered the outlook on OSR from 22.0 MMT To 20.8 MMT.

The HGCA estimated the English wheat area for the 2016 harvest down 2% at 1.66 million ha and the lowest since 2013. The decrease comes courtesy of low prices and an effort to control blackgrass. Spring barley plantings are seen 6% higher at 682k ha.

In contrast Scottish growers planted the largest wheat area since 2011 at 114k ha.

Jordan announced a tender for 100,000 MT of option origin milling wheat. Algeria tendered for a minimum of 50,000 MT of similar.

UkrAgroConsult said that oilseed crops in Ukraine were in good condition under "hot-house" type conditions with good rains mixed with temperatures 5-7C above normal.

APK Inform said that Ukraine seaports shipped out 450,600 MT of grain last week, including 159,900 MT of wheat, 90,100 MT of corn and 200,600 MT of barley. The top home was Saudi Arabia (127,100 MT) followed by Indonesia (102,400 MT).

They said that Russian shipments were still slack at 142,000 MT, of which 57,100 MT was wheat and 82,100 MT was barley. Saudi Arabia was their top home too taking 66,000 MT.

The Russian harvest now stands at 13.8 MMT off 3.2 million ha. Wheat accounts for 9.8 MMT of that off 2.2 million ha and barley a further 2.3 MMT off 562k ha.

The fact that Russian exports are still sluggish is interesting and might suggest that sellers there are waiting for the government to remove the export duty on wheat before committing to new sales. Government Ministers are expected to meet to discuss the issue at the end of the month.