EU Grains Tumble On Bearish USDA Report

12/08/15 -- EU grains slipped lower, helped on their way by a USDA report that was far more bearish than most of the trade was expecting.

In that they raised world wheat production from the 722 MMT predicted a month ago to 726.5 MMT, helped by a 3 MMT hike to 60 MMT in output in Russia this year.

Ukraine's 2015 wheat crop estimate was also raised by 1.5 MMT to 25.5 MMT, and Kazahstan's was increased 0.5 MMT to 14 MMT.

"Once again, Black Sea countries’ (Kazakhstan, Russia, and Ukraine) wheat exports are projected at a record in 2015/16. Russia accounts for the lion’s share of trade and is forecast at a record, while Ukraine’s exports are the second highest ever. Kazakhstan is up slightly from last year," they said.

"For 2015/16, production in the Middle East and several countries in North Africa is expected to rebound significantly from last year and import demand is projected to fall as a result. This will likely shift lower-priced Black Sea wheat into other markets," they added.

Russia's 2015/16 wheat exports were raised from 22 MMT to 23 MMT. Ukraine's were increased from 12.5 MMT to 13 MMT and Kazakhstan's were held at 6 MMT.

Global wheat trade was lowered more than 1 MMT to 156.8 MMT, with the US losing market share - their exports were cut from 26.25 MMT to 25.5 MMT.

The USDA's 2015 wheat production estimate for the EU was virtually unchanged at 147.8 MMT, so too were 2015/16 exports at 31 MMT.

Whilst EU ending stocks were cut from 14.1 MMT to 11.7 MMT, global carryout was increased from 219.8 MMT to 221.5 MMT.

The EU corn crop was cut by 3.5 MMT to 62.5 MMT, which was in line with expectations.

"World corn production in 2015/16 is down marginally as smaller crops in China and EU more than offset gains in Brazil, Russia, Ukraine, and the United States. At the global level, trade is up, led by higher EU import demand. Exporters are shuffled, with higher projections for Argentina, Brazil, Russia, and Ukraine more than offsetting reduced forecasts for EU and Serbia," they said.

Barley production in the EU-28 was seen little changed at 57.2 MMT, although ending stocks were reduced by a little over 0.5 MMT to just under 5 MMT. EU exports in 2015/16 were projected 0.5 MMT lower than last month at 7 MMT, which is 2 MMT down on last season.

In other news, SovEcon raised their view on this year's Russian wheat crop from 57.5 MMT to 59.5 MMT.

Jordan tendered for 100 TMT of wheat for Nov/Dec shipment.

The EU Commission said that it expects the EU 2015 rapeseed crop to fall 14.7% from last year’s record crop to 20.73 MMT (the USDA were 21.1 MMT today).

Oil World estimated EU 2015/16 soymeal imports at 21.7 MMT versus 2014/15 imports of 20.8 MMT, likely due to anticipated tighter rapemeal availability.

Nov 15 London wheat closed GBP1.65/tonne lower at GBP117.6/tonne. Sep 15 Paris wheat was down EUR2.25/tonne at EUR176.25/tonne, Nov 15 Paris corn was EUR4.75/tonne easier at EUR180.25/tonne, whilst Aug 15 Paris rapeseed was down EUR8.75/tonne at EUR373.75/tonne.