EU Grains Mixed, Weak Euro Supports Paris Market

24/09/14 -- EU grains closed mixed. The day ended with Nov 14 London wheat down GBP0.25/tonne to GBP109.50/tonne, Nov 14 Paris wheat closed EUR2.50/tonne higher at EUR152.75/tonne, Nov 14 Paris corn was up EUR3.25/tonne to EUR134.50/tonne, whilst Nov 14 Paris rapeseed was EUR3.50/tonne firmer at EUR314.75/tonne.

Paris grains were supported by the week euro. One pound tonight buys you almost 1.28 euros, the best return since July 2012.

FranceAgriMer said that only 46% of the French wheat crop has a hagberg falling number of 220 or more versus 99% a year ago. More than a quarter of the crop (27%) has hagberg levels below 140, and 19% of it has a falling number between 170-220.

They said that 17 MMT, or 45%, of this year's crop is only "third grade" (essentially feed wheat). A year ago that volume was only 4.3 MMT (11.7%).

They added that the average protein level of French wheat this year was 11.1%, with an average specific weight of 76.3 kg/hl.

Ukraine's Ag Minister said that this year's grain crop would total 60 MMT versus last season's record 63 MMT. The total doesn't include Crimea, or production in parts of the war-torn Donetsk and Lugansk regions.

Recent heavy rains have slowed up the pace of winter plantings in Ukraine, with 2.3 million ha of the intended 6 million ha sown so far.

The rains have improved soil moisture conditions, although they also mean that some corn is being cut at 25% moisture, adding drying costs that the Ukraine farmer can ill afford. Ukraine corn prices FOB the Black Sea have now tumbled to just $161/tonne.

The Russian harvest now stands at 92.4 MMT off 76.5% of the intended area. Wheat accounts for 55.5 MMT of that total off 77.2% of plan.

Winter planting progress in Russia has been brisk, with 10.4 million ha (63%) of the planned 16 million ha already sown versus 7.3 million ha a year ago.

Russian exports are showing signs of slowing up. Rusagrotrans said that Russia's grain exports in October would fall to around 3 MMT from 3.8 MMT this month. Russia shipped out a record 7.9 MMT of grains in the first two months (Jul/Aug) of the marketing year.

Russia will begin its intervention purchase programme next week (Sept 30), adding a bit more domestic demand, which is already strong due to increased livestock feeding due to retaliatory Russian sanctions against EU and US meat imports.

Ukraine has also been exporting at a frenetic pace despite the conflict in the country. Jul 1 - Sep 18 exports were 7.6 MMT, a 19% increase versus a year ago. That included 2.7 MMT of barley, more than the entire volume shipped in 2013/14 and 200 TMT more than the USDA's forecast for the whole of this season.

Kazakhstan's harvest is said to be 60% complete, which is 7 points behind last year's pace.