EU Grains Mostly Higher, But Little Changed On The Week

22/08/14 -- EU grains closed mostly a little higher on the day, following Russia's decision that it had been kept waiting long enough and it's 'aid' convoy was crossing the Ukraine border whether Kiev and the West liked it or not.

The day ended with Nov 14 London wheat up GBP1.40/tonne at GBP122.25/tonne, Nov 14 Paris wheat was up EUR2.25/tonne at EUR173.75/tonne, Nov 14 Paris corn was down EUR0.50/tonne at EUR152.75/tonne and Nov 14 Paris rapeseed rose EUR1.25/tonne to EUR324.75/tonne.

Despite the generally higher close there wasn't a great deal of change for the week, with London wheat GBP0.85/tonne lower, Paris wheat unchanged, corn down EUR1.75/tonne and rapeseed up EUR3.00/tonne.

For the London market in particular the trade is still awaiting a clearer idea on UK production this year, with some estimates as high as 17 MMT, which would be the second largest crop on record. This week's yield estimate from the HGCA however suggests that 16 MMT may be closer to the mark.

That's still not a bad return, and equates to a lot of feed wheat looking for a home, especially with the anticipated much larger EU feed wheat crop on the way and a big corn crop coming too.

For now though the market seems to have found it's level, and has managed to resist a fall below GBP120/tonne. The next big test to see if it can hold that price could come when new crop corn comes along.

We've seen a touch of sterling weakness of late too, which may be helping London wheat a little. You may not have noticed it, I certainly hadn't until I read about it today, but the pound has now fallen for seven straight weeks against the US dollar - its longest losing run since 2008. Whilst not exactly a "fall out of bed" it's lost nearly 3.5% of its value versus the dollar in that time, albeit from a starting point that was a 6-year high back at the beginning of July. We've also seen some modest weakness against the euro too during the past few weeks.

Elsewhere, Brussels issued 600 TMT of soft wheat export licences this past week, taking the marketing year-to-date total to 3.1 MMT. That's not too far behind last year's pace of 3.2 MMT as of this date. Cumulative barley exports are well down however at 1.4 MMT, a fall of 30% on a year ago. They've also granted 1.85 MMT worth of corn import licences to date in 2014/15.

A special preferential deal with Ukraine to allow 400 TMT of duty free corn imports into Europe this year has already been fully subscribed. They were also granted 101.5 TMT worth of wheat import licences this week, taking the total volume issued so far to 767.7 TMT out of a quota of 950 TMT that lasts until the end of October.

Oil World increased their forecast for the EU-28 rapeseed crop this year from a previous estimate of 23.1 MMT to a revised 23.5 MMT, a 10.85% increase on last year's harvest and a new record high volume.

FranceAgriMer said that the French wheat harvest was 97% complete as of Monday, and that the spring barley harvest was 96% done. There's not been much advancement on a week previously there. The rains that are slowing the early grain harvest look to be a positive boon for the corn crop though. The French analysts rated that at 86% good/very good, up a point on last week and fully 32 points ahead of this time last year.

Russia's Ag Ministry said that the country's 2014 grain harvest had now past the 70 MMT mark in bunker weight, and all that off little more than half (50.9%) of the anticipated area. Yields have so far averaged 2.96 MT/ha, an increase of nearly 18% on last year. Yields are however dropping off now that the harvest is getting going in Siberia, which is now 8% harvested and yields are only averaging 1.77 MT/ha, a 10% decline on a year ago.

The Ag Ministry say that the country will harvest "not less than 100 MMT" of grains this year versus 91.3 MMT in 2013. Wheat prices in Russia are said to have risen a little of late, partly as the initial harvest pressure has dissipated - those that had to sell have done so - and also due to weakness of the rouble due to the economic sanctions imposed against them by the West.

Russia's Ag Ministry said that the country will export 25-27 MMT of grains in 2014/15, versus a previous estimate of 25 MMT, and that the state will also buy 5 MMT on the domestic market to boost government stocks.

Chicago Grain Market Closing Commentary - Thursday

21/08/14 -- Weather, from Martell Crop Projections: Corn and soybeans will benefit from heavy soaking rain this week but delayed crop development is still a worry. Strong thunderstorms were rolling across the Upper Midwest this morning causing heavy rain in Minnesota and northern Iowa. Yesterday a rash of thunderstorms moved through central Iowa improving soil moisture. Heavy soaking rain was needed after a 30-day stretch of dryness previously. Soybeans especially need soaking rain to boost pod filling, as August rainfall is the key indicator for the yield. The highest soybean yields on record were achieved from very heavy August rainfall. The Midwest forecast remains wet with expectations for 1.75–3 inches of rainfall the next several days. These would be recurring showers in a trough of low pressure from central Nebraska to northwest Wisconsin. Some farms may receive 4-5 inches of rainfall with strong thunderstorms, more than the August monthly rainfall allotment.

Soycomplex: Beans remain trading in a "game of two halves" as a football pundit might say. Old crop tightness due to strong demand for both beans and meal continues to support the front-end. The promise of a huge US harvest to come, likely followed up by record South American plantings weighs on the deferred positions. Reuters reported that members of Brazil's largest co-operative plan to increase their soybean planted area by 8.4% this year. New crop Nov 14 beans made a fresh contract low. Day three of the ProFarmer crop tour hit Illinois, finding an average bean pod count of 1,299.17 versus 1,115.97 a year ago and the 3 year average of 1,085.35 pods. In Western Iowa the pod count was 1,091-1,224 versus 802.98-1,101.49 a year ago and the 3 year average of 962-1,091 pods. The final day of the tour concludes in Minnesota and the rest of Iowa today. Final data from the tour is due out on Friday. Chinese customs data showed that the country imported almost 7.5 MMT of soybeans in July, taking Jan/Jul imports to 41.7 MMT, a 20% hike compared to the same period in 2013. Of that total almost 21 MMT came from Brazil, and a further 17.3 MMT from the US. Weekly export sales came in at negative 89,600 MT on old crop and a net 1,420,600 MT on new crop, the latter being primarily for China (947,900 MT). Meal sales were 99,800 MT on old crop and 78,600 MT on new crop. The 2013/14 marketing year finishes at the end of August. The US has now shipped 44.2 MMT of soybeans this season, with outstanding sales of a further 1.85 MMT. The current USDA forecast is for net exports of 44.6 MMT in 2013/14. Lanworth estimated US 2014 soybean yields at a record 46.7 bu/acre versus a previous estimate of 46.4 bu/acre, and 1.3 bu/acre more than the where the USDA currently sit. Lanworth now put the US 2014 soybean crop at 3.855 billion bushels versus a previous estimate of 3.806 billion and the USDA's 3.816 billion. Stats Canada estimated the 2014 canola crop there ar 13.9 MMT versus the average trade guess of 14.5 MMT and production of nearly 18 MMT a year ago. They see the Canadian soybean crop at 5.9 MMT versus the average trade estimate of 6.1 MMT, although still significantly higher than 5.2 MMT a year ago. Sep 14 Soybeans closed at $11.36 1/4, up 16 1/2 cents; Nov 14 Soybeans closed at $10.38 1/4, up 1/4 cent; Sep 14 Soybean Meal closed at $413.80, up $11.20; Sep 14 Soybean Oil closed at 32.78, down 8 points.

Corn: The corn market closed a cent or two higher. Despite new crop soybeans setting contract lows, the pull to plant beans instead of corn or wheat is still quite strong. The same Brazilian co-op that said they'd be increasing their soybean plantings for 2014/15 also said that they'd reduce the area given over to corn by around 9%. The Buenos Aires Grain Exchange also said that Argentine farmers would reduce their corn area later this year by around 10% to 3.2 million hectares. They estimated that the 2013/14 Argentine corn harvest was now 94.2% complete at close to 24 MMT, leaving their final production forecast unchanged at 25 MMT. Day three of the ProFarmer crop tour entered Illinois, where the average corn yield this year was estimated at a record 196.96 bu/acre versus 170.48 bu/acre a year ago and the 3 year average of 149.36 bu/acre. In Western Iowa they found an average corn yield of 177.48-180.90 bu/acre versus 160.12–175.65 bu/acre a year ago and the 3 year average of 146.77-170.72 bu/acre. The Chinese insatiable appetite for soybean imports doesn't extend to corn. They only imported 86,369 MT of that last month, soybean imports were more than 86 times higher than that! China's Jan/Jul corn import total is now 1.46 MMT, down more than 8% versus the same period in 2013. America's corn exports to China are down 37% so far this year. Weekly export sales came in at just under 100 TMT of old crop, along with 719,300 MT of new crop. Old crop shipments to date are just under 44.9 MMT, with a further 3.85 MMT of outstanding sales. The USDA forecast for the season is for exports of 49 MMT, which now clearly looks unlikely, leaving a larger than anticipated ending stocks situation to carry over into what looks like being a huge 2014/15 production year. Lanworth estimated US 2014 corn yields at a record large 174.5 bu/acre, even if that is down a little on their previous estimate of 174.8 bu/acre. The USDA are more than 7 bu/acre lower than that at 167.4 bu/acre. Lanworth put production this year at 14.734 billion bushels versus a previous estimate of 14.766 billion and the USDA's 14.032 billion. Commodity Weather Group estimated US corn yields at 171.5 bu/acre versus a previous estimate of 171.0 bu/acre. Stats Canada estimated the corn crop there this year at 11.43 MMT, just below the average trade guess of 11.5 MMT and up slightly on 11.3 MMT a year ago. Sep 14 Corn closed at $3.62, up 2 1/2 cents; Dec 14 Corn closed at $3.68 3/4, up 1 1/4 cents.

Wheat: The wheat market closed higher. Stats Canada pegged the Canadian all wheat crop below expectations of 28.5 MMT at 27.7 MMT, and a 26% reduction on last year's record. Weekly export sales weren't great at 209,200 MT, being down 38 percent from the previous week and 62 percent below the prior 4-week average. That was the smallest weekly figure of the marketing year so far. That began on June 1. Significantly Brazil cancelled 58,800 MT now that they've re-introduced the 10% import duty on wheat shipped in from outside the Mercosur trade group. Japan bought 146,858 MT of milling wheat for Sept-Nov shipment. The breakdown was: 37,885 MT of western white US wheat; 20,480 MT of HRW US wheat; 31,421 MT of dark northern spring US wheat; 26,657 MT of Canadian western red spring wheat; 30,415 MT of Australian white wheat. China said that it had imported 116,718 MT of wheat in July, down 62.2% from a year ago. Jan/Jul imports are now 2.67 MMT, which is up 56.6% from a year ago. Of that total 782,527MT has come from the US, up 38% from a year ago. They are also importing large volumes of barley, with the Jan/Jun total at 3.2 MMT, up 167% from a year ago. The Argentine Ag Ministry estimated the 2014/15 Argentina wheat area at 4.5 million hectares, unchanged from their previous estimate and versus the Buenos Aires Grain Exchange estimate of 4.1 million. Plantings last year were only 3.65 million ha. The Ukraine Ag Ministry estimated their 2014/15 exportable grain surplus at 30.0 MMT or more, saying that there was no need to restrict milling wheat exports, effectively because the market would regulate itself. Russia said that they'd now harvested 68.5 MMT of grain so far this year off less than 49% of the planned area. That total includes 45.1 MMT of wheat off barely more than 50% of plan, plus a further 14.7 MMT of barley off 58.5% of plan. Russian grain exports are flying, with those in July being a record for that particular month, and those in August now forecast to be the highest for any month ever. Reuters reported that France are importing milling wheat from Lithuania and the UK. Strategie Grains increased their estimate for the proportion of French crop wheat crop that will cut the milling wheat mustard to 64% from 62% previously, although still well behind 88% a year ago. Sep 14 CBOT Wheat closed at $5.46 1/4, up 6 3/4 cents; Sep 14 KCBT Wheat closed at $6.22, up 3 1/4 cents; Sep 14 MGEX Wheat closed at $6.16, up 5 3/4 cents.

EU Grains Little Changed, Key Support Holds In Wheat

21/08/14 -- EU grains closed mixed, but mostly a little higher, with London wheat again testing but holding above the GBP120/tonne level, although the HGCA said that a close below that level was probably likely in the coming days.

The day ended with Nov 14 London wheat up GBP0.15/tonne at GBP120.85/tonne, Nov 14 Paris wheat was EUR0.25/tonne firmer at EUR171.50/tonne, Nov 14 Paris corn was up EUR0.50/tonne EUR153.25/tonne and Nov 14 Paris rapeseed was EUR2.75/tonne higher at EUR323.50/tonne.

The HGCA said that UK wheat yields this year were "we'll above average" at 8.2-8.5 MT/ha, up around 11-15% from 7.4 MT/ha a year ago and also well above the USDA's current forecast of 7.8 MT/ha and the 10-year average of 7.7 MT/ha.

They said that this year's wheat harvest was now 55% done on a national level, with protein levels averaging around 12% in the milling wheats, where hagbergs are at 291.

They said that the winter barley harvest was finished, pegging yields at 7.2-7.4 MT/ha versus the 10-year average of 6.4 MT/ha. Spring barley harvesting was 40% complete, with yields here also demonstrating a significant improvement on the 10-year average of 5.4 MT/ha at 5.9-6.1 MT/ha.

The winter OSR harvest is complete with yields of 3.4-3.6 MT/ha a bit closer to the 'norm' of 3.3 MT/ha, they added.

Strategie Grains were said to have revised up their forecast for the proportion of this year's French wheat crop that is milling standard from 62% to 64%, although that's still a sharp fall compared to 88% last year.

Reuters reported that France had unloaded a small coaster of around 3,000 MT of UK milling wheat in Dunkirk this week, and was currently discharging a larger 27,500 MT consignment of Lithuanian milling wheat in Rouen. A second shipment of 4,400 MT of UK milling wheat is expected to arrive in the latter port today.

French and Ukraine origin feed wheat is still undercutting UK wheat on the international market however.

The HGCA website yesterday carried an interesting article that's worth a read, suggesting that there may be an opportunity to minimise losses for UK growers in selling the long Nov 15 future, to take advantage of the unusually large premium that it currently offers over the nearby Nov 14 contract.

Sweden said that they'd harvest 2.7 MMT of wheat this year, more than double the 1.3 MMT produced in 2013.

Belarus said that they'd harvested a record 9.2 MMT of grains this year, including around 3 MMT of wheat and 2 MMT of barley. Quality this year was said to be 'very high' by the Ag Ministry.

Romania said that it had harvested a record 1.1 MMT of rapeseed this year, up sharply from less than 650 TMT in 2013, due to increased plantings and better yields.

The Spanish Ag Ministry said that they'd imported 16% less wheat (3.37 MMT) in 2013/14, and around the same volume of corn (5.84 MMT).

Ukraine said it had exported 3.7 MMT of grains so far this season, including over 1.8 MMT of wheat and more than 1.4 MMT of barley.

Russian 12.5% milling wheat trades around $240/tonne FOB on the spot market, circa GBP144.50/tonne.

Chicago Markets Mostly Lower As Large US Soy And Corn Crops Loom

20/08/14 -- Soycomplex: Beans closed lower, with funds selling an estimated net 5,000 contracts on the day on the outlook for a bin busting US crop this year. Today is the third day of the ProFarmer US Midwest crop tour, where they will be in Illinois and Western Iowa, with some decent pod counts expected. On day two they were in Indiana where the average bean count was estimated at 1,220.79 pods per square yard versus 1,185.14 a year ago and the 3 year average of 1,118.65 pods. They were also in Nebraska where the average bean count was estimated at 1,103.26 pods versus 1,138.94 a year ago and the 3 year average of 1,106.62 pods. Hear that Dr Cordonnier estimated 2014 US bean yields at 45.0 bu/acre, unchanged from his previous estimate. The USDA announced today 110,000 MT of US beans sold to Vietnam for 2014/15 shipment under the daily reporting system. Soybean prices remain relatively buoyant compared to those of corn and wheat, which is expected to encourage record plantings in South America again later this year. Trade estimates for tomorrow's weekly export sales report for beans are around 50-60 TMT of old crop and 750-950 TMT of new crop. Sep 14 Soybeans closed at $11.19 3/4, down 1/2 cent; Nov 14 Soybeans closed at $10.38, down 14 3/4 cents; Sep 14 Soybean Meal closed at $402.60, up $2.80; Sep 14 Soybean Oil closed at 32.86, up 20 points.

Corn: The corn market closed around 3-5 cents lower as the trade anticipates a huge US corn crop to be on the way again this year. Day two of the ProFarmer crop tour reported Indiana corn yields estimated at a record 185.03 bu/acre versus 167.36 bu/acre a year ago and far higher than the 3 year average of 141.24 bu/acre. In Nebraska corn yields were estimated at 163.77 bu/acre versus 154.93 bu/acre a year ago and the 3 year average of only 146.81 bu/acre. Allendale said the tour will likely find even bigger crop yields when it moves into the top producing states of Iowa and Illinois today. Hear that Dr Cordonnier estimated 2014 national US corn yields at a record 169.0 bu/acre, unchanged from his previous estimate. The early 2014 Russian corn harvest is now underway in the south of the country. Ukraine are a little further away from the beginning of their harvest. Both are expected to be eager sellers as soon as they get their new crop in. Ukraine new crop corn is reportedly offered around $182/tonne FOB the Black Sea. On the US weather front "The forecast continues very wet, though rainfall to date has been disappointing. A swath of very heavy rainfall, 3-4 inches, is predicted in eastern Nebraska, Iowa, southern Minnesota and Wisconsin this week," said Martell Crop Projections. Trade expectations for tomorrow's weekly export sales for corn are around 750 TMT to 1.1 MMT. Sep 14 Corn closed at $3.59 1/2, down 3 cents; Dec 14 Corn closed at $3.67 1/2, down 4 3/4 cents.

Wheat: The wheat market closed around 6 cents lower across all three exchanges. Taiwan is tendering for 99,410 MT of US milling wheat for Oct-Nov shipment. Japan are tendering for 146,858 MT of milling wheat for Sept-Nov shipment in their regular combo of US, Canadian and Australian origin. The Russian grain harvest tonight stands at 67.2 MMT, according to the Ag Ministry, with average yields of 3.04 MT/ha representing a 19.2% rise on this time last year. Wheat accounts for 44.9 MMT of that total, with barley adding a further 14.3 MMT. Kazakhstan said that it could export as much as 8 MMT of grain this season, despite a fall in production, due to it having fairly large carryover stocks from last year's harvest. Exports in 2013/14 were 8.7 MMT, according to the Ag Ministry. Stats Canada are out tomorrow with their latest crop production estimates. The average trade guess for the Canadian all wheat crop is around 28.5 MMT, although the range of estimates is quite wide at 26.2-34.5 MMT. Production last year was a record 37.5 MMT. There's much talk about the quality of this year's Ukraine wheat crop, and their relative recent absence from the milling wheat export market. Now we hear that Ukraine flour millers have asked for a temporary halt on milling wheat exports until a proper assessment of the quality of this year's crop can be done. Trade estimates for tomorrow's weekly export sales report are around 500-600 TMT. Sep 14 CBOT Wheat closed at $5.39 1/2, down 6 1/2 cents; Sep 14 KCBT Wheat closed at $6.18 3/4, down 5 3/4 cents; Sep 14 MGEX Wheat closed at $6.10 1/4, down 6 1/2 cents.

EU Wheat Testing Long Term Support Levels

20/08/14 -- EU grains closed mostly lower, with London and Paris wheat again testing support at GBP120/tonne and EUR170/tonne respectively.

At the close of play Nov 14 London wheat was down GBP0.40/tonne to GBP120.70/tonne, Nov 14 Paris wheat ended EUR1.25/tonne lower at EUR171.25/tonne, Nov 14 Paris corn was down EUR1.00/tonne at EUR152.75/tonne, whilst Nov 14 Paris rapeseed was up EUR1.25/tonne at EUR320.75/tonne.

Confusion still reigns over the size and quality of the Ukraine grain crop. The PM now estimates this year's harvest at 55 MMT, down from last year's record 63 MMT. He threw a spanner in the works yesterday by saying that 15% of this year's grain crop would be lost due to the ongoing unrest.

His spokesman later said that what the PM meant was that 15% of the crops in the Donetsk and Lugansk regions would be lost. Last year's grain harvest in those two regions was 2.2 MMT and 1.3 MMT respectively. The Ministry of Agriculture today said that 2.1 MMT of grain had already been harvested in Donetsk, along with a further 904,600 MT in Lugansk.

The two totals combined would broadly agree with the PM's suggested 15% crop loss estimate, if we assume that pretty much nothing else gets harvested in these two areas. The bit that confuses me is that these aren't really big wheat areas, growing more corn, according to the USDA. The latter won't be ready to harvest yet anyway, fighting or no fighting, so how has Donetsk in particular already brought in a crop almost equal to that of last year?

If that isn't confusing enough, estimates as to how much of this year's Ukraine wheat crop is only of feed grade vary from 40% to as high as 70%. They've certainly been inactive on the international tender market of late, which suggests that they possibly don't really know the answer themselves yet. Reports now suggest that the Ukraine flour milling association has asked the government to temporarily halt exports of milling wheat until the quality of the crop can be better assessed.

Meanwhile Russia's harvest continues at a pace. Their Ag Ministry say that the country has produced 66.3 MMT off less than half of the planned area (46.4%). That includes 44.7 MMT of wheat off just over half (50.4%) of plan. Those figures suggest that a final grain harvest comfortably in excess of 100 MMT is on the cards, including well over 60 MMT of wheat.

Rusagrotrans today estimated Russia's August grain exports at 3.9-4.0 MMT, up from a previous forecast of 3.6 MMT and a record for any month ever, if achieved. July grain exports were also a record for that particular month, so they have certainly hit the ground running this season.

Belarus said that their grain harvest is almost over at 9.1 MMT, falling a little short of their Ag Ministry hopes for a record 10 MMT crop this year.

ADM Germany, formerly Toepfer International, estimated the 2014 wheat crop there at 26.04 MMT, up almost 6% on last year's production of 24.6 MMT. They forecast the German 2014 rapeseed crop at 6.08 MMT, a 5.5% rise on last year.

French growers are in the unusual position of having a large volume of feed wheat to sell this year. I hear in the market today that FOB offers for French feed wheat are comfortably undercutting the UK market at the equivalent of around GBP113/tonne FOB for Aug/Sep shipment. Ukraine new crop corn meanwhile is quoted at around GBP110/tonne FOB equivalent for Nov shipment.

EU Rapemeal Prices

20/08/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:


Chicago Wheat Rises, By Mistake!

19/08/14 -- Soycomplex: Beans closed mostly lower save for the front end, as too did meal. The one point improvement in last night's crop ratings was seen as a bit bearish for new crop. Oil World said that they expect "very large" Brazilian soybean crushings and exports to cut the country's Sep 1 soybean stocks to only 17.7 MMT. That's not much considering that they harvested a record 87.5 MMT crop this year, according to the USDA. It also doesn't leave much to go round for the remaining 4 months of the calendar year. Brazil of course won't start harvesting new crop beans until January, and traditionally doesn't get going again on the export front until Feb/Mar time. That potentially means big demand for US beans in the Sep/Dec period, especially if Argentine export volumes and farmer selling remains subdued. ProFarmer are mid-way through their 4-day crop tour, although they don't issue soybean yield estimates,they do pod counts instead. Yesterday's findings revealed an Ohio average bean pod count of 1,342.42 pods per square yard plot versus 1,283.61 pods a year ago and the 3 year average of 1,190.18 pods. In South Dakota the average bean pod count was 1,057.80 pods versus 1,016.68 pods a year ago and the 3 year average of 902.76 pods. Sep 14 Soybeans closed at $11.20 1/4, up 4 3/4 cents; Nov 14 Soybeans closed at $10.52 3/4, down 5 cents; Sep 14 Soybean Meal closed at $399.80, up $7.70; Sep 14 Soybean Oil closed at 32.66, down 30 points.

Corn: The corn market closed slightly higher. Yesterday's one point drop in crop condition ratings from the USDA was a little supportive, although 72% good/excellent is still a high number. There was a bit of support from a firmer wheat market. The vibe coming back from the ProFarmer crop tour is mixed. Yesterday's results threw up a potential Ohio corn yield estimate of 182.11 bu/acre versus 171.64 bu/acre a year ago and far higher than the 3 year average of 146.13 bu/acre. In South Dakota the 2014 corn yield was estimated at 152.71 bu/acre versus 161.75 bu/acre a year ago and the 3 year average of 125.70 bu/acre. Today the tour moved on to Nebraska, where they estimated the average corn yield at 163.77 bu/acre versus the 154.93 bu/acre estimated by the tour last year and the group's three-year average of 146.81 bu/acre. Things look even better in Indiana where they forecast a 2014 corn yield of 185.03 bu/acre, up from last year’s 167.36 bu/acre and much better than the three-year tour average of 141.24 bu/acre. That figure, if achieved, would be a record for the state. US weather forecasts remain mostly favourable, with rain moving through Illinois into Indiana today. The market still believes that average 2014 US yields will end up around the 170 bu/acre mark. Sep 14 Corn closed at $3.62 1/2, up 1 3/4 cents; Dec 14 Corn closed at $3.72 1/4, up 3/4 cent.

Wheat: The wheat market closed firmer, although well off the day's highs. A news report that suggested that the Ukraine PM had said that the country could lose 15% of it's grain crop this year due to the ongoing fighting in the east was probably to blame. That would indeed be a bullish factor, should it be true. Consider though that the Ukraine Ministry have already said this week that the early grain harvest is already 98% complete on a national level. A spokesman for the PM later said that this referred to 15% of the crop in the regions where the fighting is taking place, Donetsk and Luhansk, where last year's grain harvest was 2.2 MMT and 1.3 MMT respectively. That equates to around a combined (or in this case not combined, if you get the pun) 525 TMT of grain lost. That's hardly a market-moving volume in the overall scheme of things, and the vast majority of that tonnage is likely to be corn. Exports from the country appear to be continuing as normal. The Ukraine Ministry said that the country had exported 3.578 MMT of grains so far this season, including 1.739 MMT of wheat, 1.428 MMT of barley and 368 TMT of corn. Germany's DBV raised their forecast for the country's 2014 grain harvest to 50 MMT, including 26.2 MMT of wheat. The latter is up from a previous forecast of 24.6 MMT and compares to 25 MMT a year ago. Sep 14 CBOT Wheat closed at $5.46, up 3 1/2 cents; Sep 14 KCBT Wheat closed at $6.24 1/2, up 6 3/4 cents; Sep 14 MGEX Wheat closed at $6.16 3/4, up 8 1/2 cents.

EU Grains Mixed, Rains Add Volume If Not Quality

19/08/14 -- EU grains closed mixed, with both London and Paris wheat struggling to keep their heads above water. Support at GBP120/tonne and EUR170/tonne only just held. Nerves over Russia/Ukraine have eased a little, although the Ukraine PM said that 15% of the crops in the troubled Donetsk and Luhansk regions could be lost due to the ongoing conflict in the area.

The pound took a bit of a hit after it was revealed that UK inflation fell to 1.6% in July, down from 1.9% in June. That seemingly puts the Bank of England under little pressure to raise interest rates just yet. That may have helped buoy London wheat a little today.

The day ended with Nov 14 London wheat down GBP0.20/tonne at GBP121.10/tonne, Nov 14 Paris wheat was up EUR0.75/tonne at EUR172.50/tonne, Nov 14 Paris corn was up EUR0.75/tonne at EUR153.75/tonne and Nov 14 Paris rapeseed fell EUR2.00/tonne to EUR319.50/tonne.

London wheat in particular is still swimming against a potential tidal wave of new crop feed wheat coming its way in 2014/15.

As already discussed on here, Strategie Grains' latest estimates indicate that there will be around 20 MMT more feed wheat in Europe this year than there was last season.

Today, a Ukraine analyst with Agrotrade estimated that as much as 70% of their wheat crop might also be confined to the feed bin this year.

Persistent rain in the run-up to harvest-time, the same plight suffered by the French wheat crop, is the reason they gave. That compares with a Ag Ministry forecast of "only" 40% of this season's crop being feed grade versus 25% a year ago.

If the higher Agrotrade estimate is correct then Ukraine will have around 15.4 MMT of feed wheat on it's hands this year, up almost threefold from 5.6 MMT a year ago.

This isn't good news for feed wheat prices, not with a large (and near record) EU-28 corn crop also on the way. Ukraine too are expecting to harvest a corn crop that will only be beaten in size by last year's bumper production. If EU producers can afford (and have the room) to store their 2014 corn crop that's a luxury that will not be available to many of the producers in Ukraine. Their crop will most likely simply flood onto the market as soon as it's harvested.

EU growers don't much care for current wheat, barley or rapeseed prices - let alone those for new crop corn - but it's perhaps unlikely that many here will be able to simply store their entire inventory for both financial reasons as well as those regarding physical space. Storage also costs money too of course.

So here we are, caught between a rock and a hard place, with cash prices at, or very close to, 4-year lows on all four of those commodities.

The French wheat harvest should be just about over by now, so a more accurate assessment of the final quality there shouldn't be too far away. "Highly variable" is probably the best way to describe their crop this year.

Meanwhile the German wheat harvest is said to be around 75% complete. What's been cut so far is said to be "fairly decent" according to a report on Reuters today. It's the final 25% that is now causing concern, it too has been dogged by late season rains. Hagbergs so far are said to be "OK" and protein levels are maybe down half a percentage point on the recent average.

The German farmers' association DBV raised their forecast for the 2014 grain crop there to 50 MMT versus 47.7 MMT a year ago. That includes 26.2 MMT of wheat versus a previous forecast of 25 MMT and up 6.5% compared to 24.6 MMT a year ago. Rain it seems does indeed make grain. It's quality, not quantity, that the market is worried about.

Paris wheat for Nov 14 currently trades at the equivalent of around a EUR21.50/tonne premium to London wheat, up from EUR16/tonne a month ago. We could see that gap widen further yet.

EU Rapemeal Prices

19/08/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:


Chicago Grains Closing Comments - Monday

18/08/14 -- Weather: "A fundamental shift in weather in the weather is expected this week with increasing heat and humidity in the Midwest and Great Plains. Heavy soaking rain is anticipated in corn and soybeans, but further north than originally predicted, affecting the Upper Midwest and Great Lakes. Increasing heat and humidity would come from the “Bermuda High” a large ridge of high pressure that normally resides over the western Atlantic Ocean. This week, high pressure would expand up into the United States, dominating the eastern third of the nation. Humid unstable air circulating clockwise around high pressure would fuel showers across the northern Midwest. Dryness would worsen over the south-central United States. The GFS model predicts little if any rainfall this week in Kansas, Missouri, most of Illinois and the lower Mississippi Valley where stable high pressure takes control. Midwest temperatures this week are predicted to rise above normal, ending a 6-8 week stretch of exceptional coolness. Highs in the low 90s F are predicted this week in Kansas, Missouri and Illinois, and mid-upper 80s F in the balance of the corn belt. July temperatures were the 3rd coolest on record in Midwest corn, according to the National Climatic Data Centre. This helped corn and soybeans to conserve ground moisture, though crop development was also delayed. Warming temperatures would spur corn development," say Martell Crop Projections.

Soycomplex: Beans closed higher, with the largest gains at the front end. Today was the first day of the ProFarmer US Midwest crop tour. Reports back from that suggest lower pod counts that last year in some parts of Ohio and South Dakota. The tour concludes on Thursday, with the results expected to be released on Friday. Brazil Abiove estimated the country's 2014 bean exports at 45.0 MMT versus a previous estimate of 44.0 MMT and compared to 2013 exports of 42.8 MMT. Oil World estimated this year's Canadian canola crop at 14.7 MMT, up from a previous estimate of 14.5 MMT but down 18% versus last year's record crop of 18.0 MMT. They estimated Canada’s 2014/15 canola exports at 7.8 MMT versus 9.3 MMT in 2013/14. Stats Canada release their estimates on Thursday. Weekly export inspections for beans today were 56,210 MT, which was in line with expectations. After the close the USDA reported that 71% of this year's US soybean crop was in good to excellent condition, up a point on a week ago. They said that 83% of the crop was setting pods versus 72% a week ago and 79% for the 5-year average. China are to to auction 338,700 MT of beans from reserves overnight. Sep 14 Soybeans closed at $11.15 1/2, up 13 cents; Nov 14 Soybeans closed at $10.57 3/4, up 5 3/4 cents; Sep 14 Soybean Meal closed at $392.10, up $3.80; Sep 14 Soybean Oil closed at 32.96, up 9 points.

Corn: The corn market closed around 5 cents lower. Reports from day one of the ProFarmer crop tour suggest significantly better yield potential than a year ago. In Ohio, through 9 stops, the average corn yield was estimated at 178.5 bu/acre versus 159.5 bu/acre a year ago and 141.0 bu/acre for the 3-year average. The hot and humid weather forecast could speed up corn development if it verifies. The USDA cut their corn good to excellent ratings by one percentage point to 72% after the close. A year ago 61% of the crop was rated in the top two categories. You may recall that last week's report said that 11% of the crop had dented versus the 5-year average of 16%, the first hint that crop development this year may have been a little retarded by the persistent cool Midwest conditions. That number was up this week to 22%, although that's still 5 points behind the 5-year average. Weekly export inspections came in at 970,874 MT, which was at the top end of trade expectations. Reports of a much higher volume of feed wheat being expected from this year's crop in Europe, Ukraine and possibly Russia too leans bearish for corn demand. FranceAgriMer said on Friday that 85% of the French corn crop is in good to very good condition, up a point on a week ago and fully 31 points ahead of last year. Sep 14 Corn closed at $3.60 3/4, down 5 cents; Dec 14 Corn closed at $3.71 1/2, down 5 1/2 cents.

Wheat: The wheat market closed lower. News that Brazil was to re-instate the 10% tariff on wheat imports from outside the Mercosur trade bloc was bearish for US wheat. The duty was suspended in 2013, and the US quickly took advantage providing Brazil with almost half (3.47 MMT) of its wheat imports that year. They've also been a regular buyer of US wheat during 2014 so far. The reintroduction of this duty starts immediately. Brazil will begin its 2014 wheat harvest in the state of Parana within the next few weeks. A sharp rise in output is expected this year, as it also is in neighbouring Argentina - traditionally Brazil's main wheat supplier. Production in both countries has been poor for the last 2 years, providing US wheat with a window of opportunity that now looks like closing. FCStone upped their EU-28 wheat production estimate by 3.1 MMT to 149.9 MMT. Dry areas of Eastern Australia were said to have picked up the decent rains that were in the forecast over the weekend, boosting wheat production potential there. India tweaked higher their 2013/14 wheat production estimate to a record 95.91 MMT. Ukraine said that it's wheat and barley harvests were 98% complete at 24.1 MMT and 9.3 MMT respectively. Weekly export inspections were friendly at 596,675 MT. The USDA said that spring wheat crop conditions were down 2 points on last week to 68% good/excellent. Sep 14 CBOT Wheat closed at $5.42 1/2, down 8 3/4 cents; Sep 14 KCBT Wheat closed at $6.17 3/4, down 2 cents; Sep 14 MGEX Wheat closed at $6.08 1/4, down 3 3/4 cents.

EU Grains Slide, Feed Wheat Supplies In 2014/15 Look Abundant

18/08/14 -- EU grains closed mostly lower. There wasn't a lot of bullish news around to start the week, as tensions in Ukraine seem to have eased a little over the weekend.

The day ended with Nov 14 London wheat down GBP1.80/tonne at GBP121.30/tonne (a new 4-year closing low for a front month), Nov 14 Paris wheat was EUR2.00/tonne lower at EUR171.75/tonne, Nov 14 Paris corn was down EUR1.50/tonne EUR153.00/tonne and Nov 14 Paris rapeseed was down EUR0.25/tonne to EUR321.50/tonne.

For feed wheat in particular, bad news is stacking up. Strategie Grains last week suggested that the EU-28 feed wheat crop will be 20 MMT larger than it was last year, an increase of around 50% on last year. Some 3 MMT of that extra volume may end up coming from the UK. FCStone today estimated the UK wheat crop at 16.6 MMT (maybe even higher), the largest ticket in the hat so far, and 300 TMT higher than Strategie Grains said last week.

Anecdotal reports from the country continue to suggest bumper UK yields this year, in wheat, barley and oats. A final UK wheat crop, second only to 2008's 17.2 MMT, looks like it could be on the cards.

If we use the HGCA's estimate that 58% of this year's UK wheat crop is of group 4 varieties, essentially feed wheat, then FCStones' figure puts the UK feed wheat crop at 9.63 MMT this year, which would be 45% more than in 2013.

Elsewhere, in Ukraine the early grain harvest is almost done at 98% complete at 34.72 MMT, according to the Ag Ministry. They say that just over 24 MMT of that total is wheat (in bunker weight). If we use the current USDA estimates of a clean weight total of 22 MMT this year and 22.3 MMT a year ago, along with the Ag Ministry suggestion that 40% of this year's crop is only of feed grade (versus 25% a year ago), then the Ukraine feed wheat crop this year will be 58% higher than a year ago at 8.8 MMT.

Throw into the equation that the EU-28 corn crop is looking good and in for a production increase this year, whilst competition from cheap Ukraine new crop corn remains abundant, and the outlook for feed grain doesn't look overly rosy across the next few months.

Whilst UK growers may be in the position to hold onto their grain and not sell, hoping for better prices ahead, that isn't necessarily the case in Ukraine and Russia. APK Inform today reported that Ukraine grain exports via seaports increased by 41% last week to 595.8 MMT. That total included 427.6 TMT of wheat and 162.2 TMT of barley.

FranceAgriMer reported on Friday that 85% of the French corn crop was in good to very good condition, up a point on a week ago and vastly superior to only 54% this time last year. The crop is also forward, with 100% of it now at or past the silking stage versus only 84% in 2013. They said that the French wheat harvest was 95% complete as of last Monday versus 82% a year ago.

FCStone also put the Polish 2014 wheat crop at 10.6 MMT, up 300 TMT versus Strategie Grains' recent estimate, and  who put production in 2013 at 9.5 MMT. FCStone's EU-28 soft wheat estimate was 142.7 MMT, and their all wheat forecast was 149.9 MMT, a 3.1 MMT increase on previously.

Russia said that it had now harvested 65.1 MMT of grain off only 44.9% of the planned area, with yields up 21.5% at 3.11 MT/ha.

That total includes 51.2 MMT of wheat off 49.7% of plan, with yields averaging 3.53 MT/ha, a 20.5% rise versus 2013. That makes trade talk of a 60 MMT+ crop look very easily achievable, if we believe what the local Ag Ministry say of course.

There's also talk of quality issues with Russian wheat this year, suggesting that they may have a larger proportion of feed grade to shift in 2014/15.

Jordan tendered for 100 TMT of optional origin hard wheat and a similar volume of feed barley, both for Jan/Feb shipment.

Chicago Grains Closing Comments - Friday

15/08/14 -- Weather: "A few showers have developed this morning in Iowa, Minnesota and Nebraska, the beginning of stormy period in the Midwest. The atmosphere is growing more unstable in the Great Plains and Upper Midwest setting the stage for showers and thunderstorms. The GFS model sees a very heavy rain potential. At least one inch of rain is predicted in corn and soybean farms, but 2-3 inches locally, as a trough low pressure becomes entrenched in the Midwest. Unstable conditions would persist for several days allowing rainfall to add up. The wet forecast is a particular boon for soybeans as August is the month when rainfall is most important for the yield," said Martell Crop Projections.

Soycomplex: Beans closed mostly a little lower. The FSA reported "prevent plant" US soybean acres this year at 827k which is much lower than a year ago, although higher than the trade was expecting. The NOPA crush number for July came in at 119.6 million bushels, which was above the average trade guess of 115.8 million and above the highest estimate given. The USDA reported 110,000 MT of soybeans sold to China for 2014/15 shipment. All that sounds friendly, and it is, but it was still usurped by the wet forecast for the week ahead. The Buenos Aires Grains Exchange said that Argentine sunflower plantings are 7.3% complete versus 4.5% a week ago and 8.5% a year ago. They estimated the 2014/15 sunflower planting area at 1.4 million hectares, unchanged from their previous estimate. The USDA will release updated US crop condition ratings on Monday. Last week's report had this year's US soybean crop rated 70% good to excellent. There's not expected to be much deviance from that this week, maybe one point either way. Sep 14 Soybeans closed at $11.02 1/2, up 4 1/4 cents; Nov 14 Soybeans closed at $10.52, down 4 cents; Sep 14 Soybean Meal closed at $388.30, up $5.90; Sep 14 Soybean Oil closed at 32.87, down 64 points. For the week beans lost $1.82 1/4 on a front month basis following the expiry of the Aug 14 contract, meal was down $9.20 and oil fell 257 points to a new 5-year low. Malaysian palm oil prices are also at 5-year lows on the strong ringgit and slack demand.

Corn: The corn market closed 3-4 cents higher. The FAS reported prevented plantings this spring of 1.541 million acres of US corn. The Buenos Aires Grains Exchange said that the Argentine corn harvest was 88.4% complete versus 83.9% a week ago and 98.8% a year ago. They have the 2013/14 corn crop estimated at 25.0 MMT, unchanged from previous forecast, but 2 MMT down from a year ago. Given favourable conditions, the harvest should be over in the next fortnight, they added. Dryness is seen potentially reducing corn output in Russia, Ukraine and China versus current USDA estimates. Stats Canada are due out with their latest crop production estimates next Thursday. For Canadian corn production the average estimate 11.5 MMT, from within a range of estimates of 10.7-12.0 MMT. The Ag Canada July estimate was 11.305 MMT and the 2013 corn crop was 14.19 MMT. China sold 1.7 MMT of corn at this week’s auction, or around a third of the total volume offered. Monday's USDA crop condition ratings for the 2014 US corn crop aren't expected to reveal any great change from last week's 73% good to excellent rating. The closely followed Pro Farmer US Midwest crop tour starts on Monday and ends Thursday. The trade will be looking to that for confirmation that this week's US yield estimate of 167.4 bu/acre was indeed too low, and that somewhere like 170+ bu/acre is nearer the mark. A high number could have corn back under pressure late next week. Sep 14 Corn closed at $3.65 3/4, up 3 3/4 cents; Dec 14 Corn closed at $3.77, up 3 1/2 cents. For the week corn added 14 cents on front month Sep 14.

Wheat: The wheat market jumped on heightened Russian/Ukraine tensions. Various reports said that Ukraine forces had attacked and partly destroyed a Russian armoured column's move into it's territory. A Russian "aid" convoy remains poised at the Ukraine border. That was enough to prompt nervous short-covering. The latest Commitment of Traders report showed managed money holding a net short position of 61,124 contracts in CBOT wheat, which is 5,909 less than a week ago, but still a sizable risk. The Buenos Aires Grains Exchange said that Argentine wheat planting is 98.2% complete versus 94.2% a week ago and 99.5% a year ago. They trimmed their 2014 wheat planted area estimated to 4.1 million hectares versus a previous estimate of 4.2 million, although that's still up 13.25% versus 3.62 million a year ago. "Frequent and abundant rainfall" is behind the reduction, they said. For Stats Canada's crop report next week the average all wheat production estimate is 28.5 MMT, from within a range of estimates of 26.2-34.5 MMT. The Ag Canada July estimate was 27.74 MMT and the 2013 all wheat crop was 37.53 MMT. Russia's grain harvest now stands at 63.1 MMT, off 43% of the planned area. This time a year ago the harvest was only at 50.1 MMT. Wheat accounts for 44 MMT of that total off 49% of plan, with barley adding a further 12.5 MMT off 48% of plan. The Ukraine Ag Ministry said that their early grain harvest is more or less done, producing a wheat crop of 23.8 MMT in bunker weight. They said that 40% of this year's wheat crop is only suitable to be used for feed versus 25% a year ago. Sep 14 CBOT Wheat closed at $5.51 1/4, up 14 cents; Sep 14 KCBT Wheat closed at $6.19 3/4, up 11 3/4 cents; Sep 14 MGEX Wheat closed at $6.12, up 6 1/4 cents. For the week Chicago wheat was up 1 3/4 cents, with Kansas closing down 9 1/2 cents and Minneapolis ending down 6 3/4 cents.

EU Wheat Higher On Ukraine Tensions, Although Prices Still Down On The Week

15/08/14 -- EU grains closed mostly higher, although rapeseed finished in the red, on an uptick in tensions between Ukraine and Russia.

At the close of play Nov 14 London wheat was up GBP1.30/tonne to GBP123.10/tonne, Nov 14 Paris wheat ended EUR3.00/tonne higher at EUR173.75/tonne, Nov 14 Paris corn was up EUR1.00/tonne at EUR154.50/tonne, whilst Nov 14 Paris rapeseed was down EUR0.75/tonne at EUR321.75/tonne.

For the week that still puts London wheat GBP0.70/tonne lower however, with Paris wheat down EUR0.50/tonne, corn unchanged and rapeseed falling EUR6.25/tonne.

London and Paris wheat are so far just about managing to hold above support at GBP120/tonne and EUR170/tonne respectively, although both have had the odd little wobble below those levels in recent days.

The developing situation in Ukraine continues to turn this way and that. The implications for the grain market remain unclear. The nearby market remains depressed, the Black Sea region is where the cheap offers are, although there's always the possibility that buyers will shy away from committing to purchases that they may not ultimately get if the situation in the region escalates further. There's always the possibility of an "anti-Russian" stance from some international buyers, although money talks at the end of the day.

The currencies of both countries are weak on the back of the crisis. Credit is tight and farmers need to sell to pay their bills and fund their planting programmes for 2015. Interest rates in the region are also rising.

The combination of all of those factors means that there are plenty of local forced sellers, despite low world prices. At least the weak hryvna and rouble mean that farmers are getting a bit more in their local currency for their crops, although that factor will also be increasing the cost of imported inputs.

There could be more pressure to come if farmers are pushed into a similar situation with corn once they start harvesting that, although there's also some talk that the warm and dry weather that has sped the early grain harvest in the region may now be starting to hurt potential corn yields.

Russia said that they'd harvested 12.4 million hectares of wheat so far (versus 11.8 million this time last year), producing a crop of 44 MMT to date (versus 35.1 MMT in 2013) off just under 49% of the planned area. Yields are said to be up 19% at 3.55 MT/ha. Protein levels are said to be a bit lower than last year, although they are expected to improve as the harvest progresses north, even if yields here will drop. Talk of a 60 MMT or more Russian wheat crop this year is now widespread.

The Ukraine early grain harvest, which excludes corn, meanwhile is just about done. That's produced a wheat crop of 23.8 MMT along with 9.2 MMT of barley (both volumes in bunker weight), according to the Ag Ministry.

Russian 12.5% milling wheat was said to have traded at USD217/tonne FOB the Azov Sea for prompt shipment. That's the equivalent of around only GBP130/tonne. Ukraine new crop corn is said to be offered around USD183/tonne FOB the Black Sea, around GBP109.50/tonne.

In other news, Strategie Grains estimated yesterday that the EU-28 would produce 144.1 MMT of soft wheat this year, a 6% increase versus 2013. They said that only 59% of the crop would make milling standard, down from 71% a year ago.

The bare facts of that information, if correct, mean that EU-28 feed wheat supplies in 2014/15 will rise fully 50% compared with last year to 59.1 MMT. Milling wheat availability will drop nearly 12% to 85 MMT meanwhile.

That doesn't sound too friendly to feed wheat especially with a large EU-28 corn crop coming, regardless of whether Ukraine/Russian corn production estimates take a hit, once the harvest of the latter gets going.

Defra estimated the English wheat area for this year's harvest to be up 19% at 1.8 million hectares. They pegged the winter barley area at 366k ha, up 42% and the largest since 2003. Spring barley plantings were seen down 40% at 343k ha.

The HGCA said that the UK harvest was 45% done as of Aug 12, as the remnants of Hurricane Bertha slowed progress. Only around 320k ha was cut for the week through to that date, half the area harvested the week prior, they estimated.

"Yields continue to be above average for most crops, although where crops were waterlogged over the winter, established poorly or there were high weed and disease levels, yields have been reduced," they said.

The 2014 winter wheat harvest is now around 30% done nationally. In their first forecast of the season so far they estimated yields at 8.0-8.2 MT/ha, up around 5% versus the 10-year average and 9.5% above last year's 7.4 MT/ha. Bushel weights are averaging 77 kg/hl, with hagbergs and proteins in the milling wheats at 295 and 12% respectively, they added.

The UK winter barley harvest is almost over at 95% complete. Yields are much better than the 10-year average of 6.4 MT/ha at 7.2-7.4 MT/ha, a rise of 14%. Around 20% of the nation's spring barley crop had been cut as of Aug 12, with yields expected to average 5.9-6.1 MT/ha, up 11% on the 10-year average.

Virtually all (97%) of the UK's 2014 winter OSR harvest was now complete, with yields averaging 3.4-3.6 MT/ha, up around 6% versus the 10-year average of 3.3 MT/ha, they concluded.