EU Grains Mostly Higher, But Rapeseed Consolidates Recent Gains
At the finish Jul 15 London wheat was up GBP2.50/tonne at GBP114.70/tonne, Sep 15 Paris wheat was EUR1.75/tonne higher at EUR182.50/tonne, Jun 15 Paris corn was up EUR1.00/tonne at EUR155.00/tonne and Aug 15 Paris rapeseed was down EUR0.75/tonne to EUR375.75/tonne.
Nothing has fundamentally changed for rapeseed, and the Aug 15 contract hit new highs in early trade, but consolidated lower by mid-morning. Reuters reported that an unseasonable frost in Manitoba had "wiped out many canola fields" which would now have to be replanted - if farmers can find the seed required to do so at this late stage.
Canada is of course the world's largest exporter of rapeseed, and despite the EU being the biggest producer, we are also the largest consumer and thus still a big net importer of the seed. The USDA currently has a 3.25 MMT deficit pencilled in for the EU between production and consumption in 2015/16, so the market here is particularly sensitive to changes in global output and tightening stocks.
Elsewhere "in Russia, the south of the country is still suffering of water deficit despite of small rains this weekend. Temperatures, like in France, will approach 30°C in coming days," noted Agritel.
This is causing some nervousness in the wheat market, with fund money heavily short in Chicago. Despite official assurances that all is well, and that grain production in Russia could hit (or even top) 100 MMT this year, the trade is not entirely convinced that things are quite so promising as the Russian Ag Ministry would have us all believe.
The Russian Vice PM today said that the country could export 25-27 MMT of grains in 2015/16, if a harvest of 95-100 MMT could be achieved. That would be less than they are set to do in the current marketing year (exports were already at 28.75 MMT as of May 27), although not by too much.
Private estimates of potential winter wheat yields in Russia this year should start to filter through in the coming weeks, and will be watched with interest.
Spring planting in Kazakhstan meanwhile remains retarded, with 62% of the grain crop now in the ground (on 9.12 million ha) compared to 91.4% (13.44 million ha) a year ago.
FranceAgriMer reported that the country's soft wheat exports hit a marketing year high of more than 2 MMT in March, a 21% increase compared with a year previously. Of that just under 1.5 MMT went to non-EU destinations compared with 1.17 MMT a year ago. Egypt was the top home taking 437 TMT, followed by Thailand on 238 TMT.
Season to date exports (Jul/Mar) are now over 14 MMT, although that's still a little below those of a year ago. Full season exports are expected to hit 18.26 MMT versus 19.17 MMT in 2013/14.
Despite a busy export campaign, French May 1 wheat stocks were pegged up 6% at 5.9 MMT, barley stocks were said to be up 17% at 2.5 MMT, and those of corn up 33% at 4.7 MMT thanks to bumper production last year.
Algeria said that drought had cut their 2015 grain crop for a second year in a row, estimating production at 3.4 MMT versus 4.9 MMT in 2013. The USDA estimates that they will need to import 7.4 MMT of wheat in 2015/16, up from 7.1 MMT in 2014/15 and nearly 14% more than they did in the previous season.