EU Grains Mixed On Light News Day

08/03/16 -- EU grains closed mixed. News was thin ahead of tomorrow's WASDE report from the USDA and with Russia closed.

At the finish, front month Mar 16 London wheat was down GBP0.05/tonne at GBP101.50/tonne, Mar 16 Paris wheat was EUR1.25/tonne firmer at EUR144.25/tonne, Jun 16 corn fell EUR1.00/tonne to EUR152.25/tonne and May 16 rapeseed was EUR2.50/tonne lower at EUR351.25/tonne.

Russia remained closed for a holiday for a second day, limiting fresh news from that direction. Crude oil traded lower after hitting 3-month highs yesterday, the sentiment from which seemed to spill over into other markets.

The international tender front is a bit quiet so far this week. Syria are in the market for 200,000 MT of wheat and Algeria are said to be shopping for feed barley.

In their first look into crop production prospects for 2016, early forecasts "are showing a good level of cereal production," the EU commission said.

They forecast a 2016 EU soft wheat crop of 143.6 MMT, a 5.5% decline on a year ago.

That's only half of the story though "Europe’s inventories of unsold soft wheat are predicted to reach an eight-year high at the end of June 2017 as exports of the grain slide for a second season," noted Bloomberg.

They were referring to the Commission's estimate for a 200,000 MT rise in EU soft wheat ending stocks to 17.4 MMT come the end of 2016/17.

EU 2016/17 soft wheat exports are estimated at 27 MMT versus 29.1 MMT this season and 33.3 MMT in 2014/15.

EU barley production later this year is estimated at 61.5 MMT, up marginally on 61.3 MMT last year. Rapeseed output in 2016 was forecast at 21.3 MMT, also little altered on 21.4 MMT a year ago. The EU 2016 corn crop will rebound to 67.3 MMT, up 16% compared to 58 MMT in 2015.

"Unless new weather events change the crop development progress, there is no reason for higher cereal prices. This development raises the question on whether this is the new average price level to be expected, although it is too early to assess it," the Commission pondered.

The USDA's March WASDE report is due tomorrow. They won't give us their first estimates on global crop production and demand for the year ahead until May.