EU Grains Mostly Higher Aided By Weak Euro
At the finish Nov 16 London wheat was down GBP1.60/tonne at GBP138.30/tonne, Dec 16 Paris wheat was up EUR0.75tonne at EUR168.25/tonne, Jan 17 Paris corn ended EUR0.50/tonne firmer at EUR165.75/tonne and Feb 17 Paris rapeseed closed EUR2.25/tonne higher at EUR399.75/tonne.
London wheat seems unable, for the time being at least, to break and hold above GBP140/tonne on front month Nov 16. A weak euro, rather than a string sterling, today didn't help. The pound closed above 1.17 against the single currency for the first time in more than 2 months.
Market analysts fear an anti-EU backlash vote coming up in the French and German general elections in the New Year, undermining the entire future of the eurozone, following Brexit and the surprise Trump election. That's putting the euro under pressure, supporting the market on the continent.
Rapeseed meanwhile continues to test the EUR400/tonne level, helped today by firmer crude oil prices. It hasn't closed above this level since April 2014.
The Ukraine Ag Ministry raised their forecast for this year's grain crop from 63 MMT to 64 MMT. Harvesting of that is now said to be 97% complete at 59.96 MMT. That includes a corn harvest that's 79% complete at 20.84 MMT.
With the corn harvest winding down, that's the crop on which they are now starting to concentrate their main export effort. Total grain exports via seaports last week were 616.7 TMT (up from 463.3 TMT the previous week). That included 158 TMT of wheat, 408.2 TMT of corn and 50.5 TMT of barley.
The Ministry said that Ukraine winter wheat planting is now 95% complete on 5.9 million ha, along with 85% of the winter barley area (877k ha).
Winter rapeseed planting in Ukraine increased for the first time since 2013 this year, with the Ministry saying that 85% of the crop was sown in the optimum time window. Emergence is placed at 90%.
Russia's seaports exported 444.6 TMT of grains last week, down from 578.8 TMT The previous week, as their efforts struggle a little. Last week's total included 326.1 TMT of wheat, and 115.2 TMT of corn.
The Russian Ministry said that season to date grain exports (to Nov 16) total 14.77 MMT, a 4.6% decrease versus the same period in 2015/16. Wheat accounts for 79% (11.69 MMT of that total, with barley a further 1.55 MMT and corn 1.45 MMT.
Chicago Grains End Higher
18/11/16 -- Soycomplex: Beans closed higher on the day and for the week. Strong Chinese demand underpins the market, but decent South American weather and a weaker Brazilian real cap gains. The USDA announced another private export sale of 165,000 MT of US soybeans for delivery to China during the 2016/17 marketing year under the daily reporting system. Jan 17 Soybeans settled at $9.93 3/4, up 4 1/4 cents; Mar 17 Soybeans settled at $10.02 1/4, up 3 3/4 cents; Dec 16 Soybean Meal settled at $310.40, down $1.10; Dec 16 Soybean Oil settled at 34.05, up 35 points. For the week that puts Jan 17 beans 7 3/4 cents higher.
Corn: The market closed around 3-5 cents higher on the day and for the week. Producer selling remains light at these levels despite harvest pressure. South Korea's NOFI were said to have bought 68 TMT of optional origin corn, and their FLC purchased 117 TMT of the same. MFG were reorted to have bought 132 TMT of similar material. The Buenos Aires Grain Exchange reported Argentine corn planting at 40.3% complete on an anticipated final area of 4.9 million ha. "One of the major Chinese grain producing provinces is turning to subsidies, equivalent to $1.10/bu, to get processors to consume the current harvest," report FCStone. Dec 16 Corn settled at $3.45 1/2, up 3 1/2 cents; Mar 17 Corn settled at $3.53 1/2, up 3 3/4 cents. For the week Dec 16 corn was up 5 1/4 cents.
Wheat: The wheat market ended higher on the day and for the week. The Buenos Aires Grain Exchange reported Argentine wheat planting at 12.1% complete. They have total plantings forecast at 12.5 million ha, an increase of 21% on last year. Japan purchased 136,726 MT of wheat, of which 35 TMT was from Canada and the balance from the US in their regular weekly tender. French winter wheat was said to be 95% sown, two points behind year ago levels. Crop conditions were placed at 95% good to very good, unchanged on a week ago, but 2 points behind this time last year. Dec 16 CBOT Wheat settled at $4.08, up 5 cents; Dec 16 KCBT Wheat settled at $4.13 3/4, up 5 cents; Dec 16 MGEX Wheat settled at $5.29 1/4, up 2 1/2 cents. For the week, Chicago wheat settled 5 cents higher, with Kansas up 3 1/2 cents and Minneapolis 9 1/4 cents firmer.
EU Grains End Higher On The Day And For The Week
18/11/16 -- EU grains closed almost uniformly higher on the day, and for the week.
At the close Nov 16 London wheat was up GBP0.85/tonne at GBP139.90/tonne, Dec 16 Paris wheat was EUR2.75/tonne higher at EUR167.50/tonne, Jan 17 Paris corn rose EUR0.75/tonne to EUR165.25/tonne and Feb 17 Paris rapeseed gained EUR5.00/tonne to EUR397.50/tonne.
For the week London wheat was GBP2.40/tonne firmer, Paris wheat was up EUR6.00/tonne, corn added EUR2.75/tonne and rapeseed was EUR5.25/tonne higher.
Rapeseed supplies are proving hard to find after another difficult UK and EU harvest year. Old World reported that the EU imported 370 TMT of rapeseed in September, down from 379 TMT a year previously. Availability from normal top supplier, Ukraine, dwindled to just 76 TMT versus 298 TMT in September 2015.
Total Q1 rapeseed imports (Jul/Sep) were 613 TMT versus 749 TMT a year ago, with Ukraine providing 469 TMT of that total (down from 629 TMT in 2015).
The HGCA report that the proportion of UK wheat samples hitting a high quality spec is the highest since 2003 this year.
"The 2016 results back up anecdotal comments suggesting the UK is in a ‘unique’ situation this season in terms of quality. A higher quality domestic crop this season could encourage UK millers to use more domestic wheat, displacing imports, which we have started to see. Furthermore, a lower average wheat specific weight this season means that extraction rates are likely to be lower, which could see an increased usage in wheat milled," they say.
This could also help explain the relatively buoyant price of feed wheat at the moment, coupled with increased demand for the same from the bioethanol industry.
FranceAGriMer reported that the French corn harvest had reached 95% complete, similar to a year ago. French winter wheat was said to be 95% sown, two points behind year ago levels. French winter barley is 99% sown, the same a last year.
French winter wheat crop conditions were placed at 95% good to very good, unchanged on a week ago, but 2 points behind this time last year. Winter barley was rated 92% good to excellent, down 2 points on last week and versus 98% at this point a year ago.
FranceAgriMer said that the country had exported 1.942 MMT of soft wheat in Q1 of 2016/17, a 28% reduction on a year ago.
Egypt's GASC said that they are to add Paraguay, Bulgaria and Hungary to their list of approved wheat suppliers.
Chicago Grains Post Modest Gains
17/11/16 -- Soycomplex: Beans closed higher. Weekly export sales came in at the top end of trade expectations. At 1,418,700 MT for 2016/17 these were up 51 percent from the previous week, although still down 23 percent from the prior 4-week stellar average. Total YTD commitments are now running 7.6 MMT ahead of a year ago versus the 3.1 MMT projected seasonal increase from the USDA. Exports this week of 3,034,100 MT were a very impressive (the second highest ever I read) and of course a marketing-year high with China taking 2,363,500 MT of the total. Informa estimated 2017 US soybean plantings at 88.61 million acres versus 88.49 million previously. Weather conditions appear to be improving in Argentina and Brazil. Jan 17 Soybeans settled at $9.89 1/2, up 3 3/4 cents; Mar 17 Soybeans settled at $9.98 1/2, up 4 cents; Dec 16 Soybean Meal settled at $311.50, up $3.10; Dec 16 Soybean Oil settled at 33.70, down 40 points.
Corn: Corn closed around 3 cents or so higher. Weekly export sales of 1,661,000 MT for 2016/17 were up 35 percent from the previous week and 47 percent from the prior 4-week average. Trade estimates had been for sales of only between 900,000 MT and 1.2 MMT. Exports of 540,800 MT were however down 39 percent from the previous week and 31 percent from the prior 4-week average. Commitments to date are running 13.1 MMT ahead of last year compared to the 8.32 MMT y-o-y increase projected by the USDA. The USDA also announced an additional flash sale of 106,200 MT of corn to unknown destinations under the daily reporting system. Informa estimated 2017 US corn plantings at 90.84 million acres from 90.97 million previously. That is is 3.66 million acres lower than the USDA’s current estimate for 2016. In Russia 2016 corn harvesting is said to be 71.6% complete at 11.9 MMT. EU season to date corn imports are running at 3.1 MMT versus 3.6 MMT this time a year ago. Dec 16 Corn settled at $3.42, up 3 1/2 cents; Mar 17 Corn settled at $3.49 3/4, up 3 1/4 cents.
Wheat: Wheat closed with fair gains across the three exchanges. Weekly export sales of 598,400 MT for delivery in marketing year 2016/17 were down 22 percent from the previous week, but up 11 percent from the prior 4-week average. That was at the top end of trade forecasts of 400,000 to 600,000 MT. Exports of 402,000 MT were up 6 percent from the previous week and 12 percent from the prior 4-week average. The primary destinations were Morocco (114,800 MT), Brazil (62,000 MT), South Korea (48,600 MT), Mexico (45,300 MT) and Algeria (31,500 MT). Commitments to date are running 3.94 MMT over a year ago vs the USDA’s projected 5.44 MMT y-o-y increase. Informa lowered their US winter wheat acreage outlook to 33.76 million acres from 35.42 million previously. All wheat plantings will decline approximately 3 million acres they think. Algeria were said to have booked 580,000 MT of optional origin wheat for January delivery, some of which may be US origin and show up in next week's export sales report. Russia said that they'd harvested 75.8 MMT of wheat off 98.1% of the planted area. Dec 16 CBOT Wheat settled at $4.03, up 6 cents; Dec 16 KCBT Wheat settled at $4.08 3/4, up 5 1/4 cents; Dec 16 MGEX Wheat settled at $5.26 3/4, up 8 1/4 cents.
EU Grains Little Changed Amid Lack Of News
The day ended with Nov 16 London wheat unchanged at GBP139.05/tonne, Dec 16 Paris wheat was EUR0.75/tonne higher at EUR164.75/tonne, Jan 17 Paris corn rose half a euro to EUR164.50/tonne and Feb 17 Paris rapeseed was up EUR0.25/tonne to EUR392.50/tonne.
The pound closed at close to 1.17 versus the euro - it's best level in two months - capping any potential for rises in London wheat.
Algeria's reported 400 TMT purchase of wheat yesterday was re-reported as 580 TMT today. The exact origins bought are unknown, but traders say German and Baltic wheat almost certainly figured, and possibly even French material despite their woes. US wheat keeps getting a mention, but we will maybe have to wait until next week's USDA weekly export sales report for confirmation of that one.
Another origin that may have featured is Argentine wheat, although some say that this will struggle to meet Algeria's strict import quality criteria.
French analysts Strategie Grains forecast virtually no change to the area EU-28 farmers will sow with soft wheat, barley and corn for the 2017 harvest. They place soft wheat plantings at 24.3 million ha (24.2 million a year ago), barley area at 12.4 million ha and the area given over to corn at 8.8 million ha.
They placed EU-28 soft wheat production for 2016 at 135.7 MMT, down 0.2 MMT from previously. Barley output is seen at 59.7 MMT (unchanged) and corn production was lowered 0.2 MMT to 59.6 MMT.
Brussels have changed the way they report EU grain exports, now reporting on shipment volumes themselves rather than the amount of export licences issued.
This week's soft wheat total was 346 TMT, up 19% on a week ago, taking the total volume so far this season to 8.96 MMT (8.17 MMT a year ago). France's share was 16.5% of the weekly total.
Barley exports came in at 113 TMT, up 43% from a dismal effort last week. France picked up just 1.5% of that. That takes the cumulative barley export total for the season to 1.635 MMT. Season to date corn imports are running at 3.1 MMT versus 3.6 MMT this time a year ago.
Russia announced that their 2016 grain harvest is 95.9% complete at 122.3 MMT. That includes 75.8 MMT of wheat (98.1% done) and 19.1 MMT of barley (97.2% done). Corn harvesting is 71.6% complete at 11.9 MMT. Winter grain planting for 2017 is now said to be 99.3% done on 17.2 million ha (versus 16.3 million a year year ago at this time).
Ukraine said that in the first four months of the 2016/17 marketing year (Jul/Oct) they had exported 14.76 MMT of grains, including 8.96 MMT of wheat, 3.73 MMT of barley and 2.0 MMT of corn.
Export potential for the remainder of the season is 26.3 MMT, giving total 2016/17 exports of around 41 MMT, according to the Ministry of Economic Development.
Chicago Grains Drift Lower As USD Hits 14-Year Highs
16/11/16 -- Soycomplex: Soybeans closed a little lower on reports that Brazilian cash markets are pricing themselves a bit more aggressively relative to the US. That didn't stop the USDA announcing another flash sale of 165,000 MT of US soybeans for delivery to China during the 2016/17 marketing year though. The trade will be expecting another strong figure in tomorrow's weekly export sales report to back up all this recent business - with figures of 1.2 and 1.5 MMT being mentioned - I wouldn't be surprised if the actual number isn't larger. Reports of decent growing conditions for much of South America is a negative, although some suggest that earlier rains in Argentina may have washed out some 600k ha of early planted beans. Jan 17 Soybeans settled at $9.85 3/4, down 3 3/4 cents; Mar 17 Soybeans settled at $9.94 1/2, down 3 1/2 cents; Dec 16 Soybean Meal settled at $308.40, down $1.70; Dec 16 Soybean Oil settled at 34.10, down 11 points.
Corn: The corn market closed around 2-3 cents lower. The US Energy Dept reported weekly US ethanol production to be up 15,000 barrels/day last week, taking the weekly total to just over 1 million/day again. Ethanol stocks were down 620,000 barrels. The US dollar index shrugs off the initial bearish reaction to last week's Trump election victory and trades at a 14 year high. The strong US dollar and weak Brazilian real were bearish - the real is down 9% in a week versus the USD. The Malaysian ringgit also continues to fall against the USD. Taiwan were reported to have purchased 65,000 MT of US corn for Feb/Mar shipment. Agritel forecast the French corn crop "not to exceed 11.5 MMT". Russia reported their 2016 corn harvest had now reached 70.9% complete for a crop of 11.7 MMT to date. Average yields are 5.71 MT/ha versus only 5.15 MT/ha a year ago. Trade expectations for tomorrow's USDA weekly export sales report are between 900,000 MT and 1.2 MMT. Dec 16 Corn settled at $3.38 1/2, down 3 cents; Mar 17 Corn settled at $3.46 1/2, down 2 3/4 cents.
Wheat: The wheat market closed mixed, with Chicago and Kansas lower and Minneapolis higher. Algeria were reported to have bought 400,000 MT of wheat for January delivery, with some suggesting that US origin may have figured in the mix. Japan are in the market for their regular weekly tender of 136,726 MT of US, Canadian and Australian wheat. Russia reported the last of their wheat harvest to be dragging it's heels. Harvesting there is 98.1% complete at 75.8 MMT. Barley harvesting is 97.2% done at 19.1 MMT. Russian winter grains are said to be sown on 17.2 million ha, or 99.3% of the government target. Ukraine said that their 2017 winter wheat crop is now 95% planted on 5.88 million ha. Kazakhstan reported a final 2016 bunker weight grain harvest of 23.7 MMT, or 21.4 MMT in clean weight. The USDA's FAS in Nigeria forecast the country's wheat import needs this season at 4.5 MMT. Trade forecasts for tomorrow's weekly export sales report from the USDA are at 400,000 to 600,000 MT. Last week's sales were impressive for once at 769,600 MT. Dec 16 CBOT Wheat settled at $3.97, down 2 cents; Dec 16 KCBT Wheat settled at $4.03 1/2, down 4 1/2 cents; Dec 16 MGEX Wheat settled at $5.18 1/2, up 3 3/4 cents.
UK Wheat Exports More Than Double Jul/Sep
At the finish Nov 16 London wheat was down GBP0.90/tonne at GBP139.05/tonne, Dec 16 Paris wheat was up EUR1.00/tonne at EUR164.00/tonne, Jan 17 Paris corn ended EUR0.50/tonne firmer also at EUR164.00/tonne and Feb 17 Paris rapeseed closed EUR0.25/tonne lower at EUR392.25/tonne.
The latest UK customs figures show wheat exports for the first three month of the marketing year (Jul/Sep) came in at 711.7 TMT - more than double the same period in 2015/16. Fellow (for now) EU countries took 580.9 TMT of that total, up 181% versus last season.
The largest home was the Netherlands (184.1 TMT), followed by Spain (144.4 TMT) and then France (85.2 TMT). Also featuring high on the list were unusual destinations such as Vietnam (66 TMT) and Algeria (60 TMT).
The weak pound and failure of this year's French wheat crop are clearly providing the UK with a window of export opportunity.
UK wheat imports Jul/Sep were down slightly on year ago levels at 426.1 TMT, with Canada (92.7 TMT) the largest provider.
UK corn imports fell 11% Jul/Sep to 390.9 TMT. France was the biggest supplier, although imports from this direction were down 13% at 159.7 TMT.
Can/will this trend continue? UK feed wheat prices (delivered, East Anglia) have risen to their narrowest discount to imported corn (any origin, CIF optional ports) for nearly a year, the HGCA point out. More importantly maybe for UK wheat prices is that "currency volatility has made UK wheat trading essentially currency trading by proxy," they add. The direction of sterling versus the euro and USD for the remainder of the season therefore remains all important.
In other news, Algeria were reported to have bought 400,000 MT of possibly US, German and Baltic origin wheat in a tender.
Ukraine said that their 2017 winter wheat crop is now 95% planted on 5.88 million ha. Winter barley sowing is said to be 84% done on 866k ha.
Russian winter grains are said to be sown on 17.2 million ha, or 99.3% of the government target.
The German Oilseeds Association forecast OSR plantings there to increase 1.5% to 1.35 million ha for the 2017 harvest.
