EU Grains Mostly Lower, Russia Downplay Export Ban Rumours

09/12/14 -- EU grains closed mostly lower, with wheat down after the Russian Deputy PM said that the subject of possible grain export restrictions hadn't even been discussed at today's cabinet meeting of government ministers.

At the finish Jan 15 London wheat was down GBP1.30/tonne at GBP128.80/tonne, Jan 15 Paris wheat fell EUR2.50/tonne to EUR186.50/tonne, Jan 15 Paris corn was EUR0.25/tonne firmer at EUR156.75/tonne, whilst Feb 15 Paris rapeseed was unchanged at EUR343.00/tonne.

The French Farm Ministry said that the country's winter wheat area was a six year high of 5.08 million hectares, up 160k ha on last year. Durum plantings are seen up almost 10% to 309k ha, although this is still an historically low area.

Winter barley plantings were also forecast at a 6 year high of 1.26 million hectares, up 14.5% versus last year.

Where's the extra area coming from? Partly winter OSR, where plantings for next year's harvest are seen falling to 1.486 million ha, although that's still only a relatively modest 1% decline on a year ago.

Rusagrotrans said that Russia had exported 2.99 MMT of grains in November, a 13% decline compared to October's 3.42 MMT. They noted a "significant slowdown" in exports towards the end of the month.

Whether this is simply down to adverse weather conditions, seasonal factors, or the much talked about new phytosanitary rules and/or delays in obtaining the necessary export certificates is unclear, but the situation merits watching.

Wheat accounted for 68.5% of November's exports, down from 72% in October. Barley's share rose to 21.3% from 18.3%, and corn's fell to 7.7% from 8%, they added.

SovEcon apparently said that they expect December's Russian grain exports to remain high due to the weakness of the rouble however.

The Ukraine Ag Ministry said that the country had exported 16.22 MMT of grains so far this season, including 7.57 MMT of wheat, 3.37 MMT of barley and 5.09 MMT of corn.

A spokesperson for Ukraine's DZI said that 2014/15 grain exports could reach 35 MMT, a 3 MMT rise compared to last season's record, although this would depend on the political, economic and world market situation, they added.

All eyes are now on the USDA who are due to release their December world supply and demand numbers tomorrow. I'll be looking for them to potentially raise 2014/15 EU-28 wheat exports from the existing 28 MMT estimate, and possibly trim US exports a little.