EU Grains Rout Continues

18/08/15 -- EU grains closed mostly lower, with London wheat kicked along the way courtesy of a suddenly higher pound,

At the close, Nov 15 London wheat was down GBP1.70/tonne to GBP114.00/tonne, Sep 15 Paris wheat was EUR2.00/tonne easier at EUR173.75/tonne, Nov 15 Paris corn was down EUR1.00/tonne to EUR176.25/tonne, whilst Nov 15 Paris rapeseed was EUR2.00/tonne lower at EUR368.75/tonne.

Sterling strength was tied to a surprise rise in CPI inflation last month, albeit only from 0% to 0.1%, but even that was enough to foster ideas of a UK base rate rise sooner rather than later.

That was enough to send Nov 15 London wheat crashing to a fresh lifetime contract low of GBP113.50/tonne.

Ukraine said that their early grain harvest is now complete at 36.66 MMT. This time last year they were 98% done with a crop of 34.83 MMT.

Ukraine's 2015 wheat harvest came in at 26.82 MMT, with yields averaging 3.94 MT/ha, say the Ag Ministry. Their barley crop has ended up at 8.51 MMT, with yields at 3.05 MT/ha, they add.

These figures are in bunker weight by the way. According to the USDA Ukraine's 2014 wheat harvest (in cleaned weight) was 24.75 MMT and their barley crop last year was 9.45 MMT.

Their 2015 rapeseed harvest is also complete (that isn't included in the early grain harvest totals). That's come in at 1.73 MMT on an average yield of 2.57 MT/ha, say the Ag Ministry. That's a 21% fall from 2.2 MMT a year ago.

Ukraine's Aug 1 grain stocks were reported as 24.5 MMT, up 17% on a year ago, including 17.5 MMT of wheat, 2.7 MMT of barley and 2.0 MMT of corn.

Russia meanwhile said that it's 2015 harvest is 43.4% complete on 20.4 million ha, producing a crop of 59 MMT to date with yields averaging 2.90 MT/ha - down from 3.17 MT/ha a year ago.

That includes a wheat harvest that's almost at the halfway stage (49.5% complete) producing 43 MMT to date with yields at 3.23 MT/ha, down 9.2% on a year ago. They've also harvested 10.9 MMT of barley off 49.4% of the planted area, with yields averaging 2.49 MT/ha, down 11% versus this time last year.

Germany's DBV estimated the 2015 grain harvest there to be down 12% at 46.5 MMT, as spring drought left it's mark, especially on winter wheat. That crop is seen 10% lower than a year ago at 24.6 MMT, despite a 2% rise in planted area. Yields are estimated 12% lower at 7.6 MT/ha. Quality this year is quite variable, they said.

The winter barley harvest is over at 9.2 MMT, a 3% decline on a year ago. Spring barley also suffered at the hands of the heat and dryness, that harvest is estimated 5% lower at 2.0 MMT despite a 7% increase in plantings.

The crop with the largest year-on-year production decline in Germany is rapeseed. DBV estimate that harvest at 5.0 MMT, down 20% on last year's record, partly due to an 8% decline in planted area due to the new neonicotinoid ban.

German ex-farm prices are around EUR145-175/tonne on winter wheat depending on location and quality, with winter barley trading around EUR130-150/tonne, they said.

That's not too different to prices in East Anglia in sterling terms, with spot feed barley worth little more than GBP90/tonne and feed wheat just about making three figures.