EU Grains Rise On Russian Export Duties, Success For France In Egypt Tender

22/12/14 -- EU grains opened lower, but turned around to trade mostly higher mid-morning following a Russian announcement that they are to rush through issuing "temporary" export duties with more or less immediate effect.

At the close Jan 15 London wheat was up GBP1.70/tonne at GBP134.00/tonne, Jan 15 Paris wheat had jumped EUR2.50/tonne to EUR198.50/tonne, Jan 15 Paris corn was up EUR2.50/tonne at EUR159.00/tonne, whilst Feb 15 Paris rapeseed was EUR1.25/tonne higher at EUR350.50/tonne - the first close above EUR350/tonne on a front month since June.

The Russian Deputy PM announced that the government were to rush through a draft proposal to introduce export duties today, and that these could be in place as early as tomorrow.

He went on to say that of the 28 MMT of grains that Russia are expected to export this season, 21 MMT, or 75%, had already been shipped.

The Russian Ag Ministry don't seem to entirely agree with him as they said that the country had exported less than 20 MMT of grains so far this season, including 15.5 MMT of wheat, almost 3 MMT of barley and nearly 1 MMT of corn (to Dec 17).

The other main news of the day was Egypt's GASC buying 300 TMT of wheat for Jan 21-31 shipment over the weekend. Of that total 240 TMT was French, with Russian wheat also getting one 60 TMT cargo, thanks to a cheaper freight rate.

Overall the prices paid were around $9/tonne more expensive than their last January purchase.

They've now bought 655 TMT of wheat this month, compared to only 355 TMT in November. This latest purchase was said to be their largest single buy of French wheat in 3 years.

All in all this looks friendly for EU wheat. OK, Russian wheat was in the line-up, but only one cargo was booked (and offered), and that was only due to a freight advantage of at least $2.50/tonne. French wheat was the cheapest origin otherwise. US wheat was priced out by the best part of $30/tonne, and that was before adding on the much more expensive shipping costs.

Today's Russian news should continue to ensure that EU wheat picks up further export business into North Africa and beyond in the weeks and months ahead. And meanwhile GASC are buying more as the price goes up, not less.

Other than that, fresh news was relatively thin, as you might expect only a few days before Christmas.

The Ukraine Hydrometeorlogical Centre said that winter grains there could be disadvantaged by the unusually mild December that they have seen, if and when a hard freeze returns.

They said that 40% of the country's winter grains are rated in "good" condition, with 44% "satisfactory" and 16% "weak/thinned". The latter category has seen a 2 point improvement from earlier in the month, but having said that it is still high compared to only 4% this time last year.

The USDA's FAS in Bulgaria said that wet weather had cut winter wheat plantings there by around 150-200k ha from what was expected. They estimated the country's 2015 wheat harvest at 4.6 MMT, down 6.5% on last year.

The German Stats Office said that the country's growers had increased winter wheat plantings by 2.8% to 3.25 million ha. Barley plantings are up 3.3% to 1.23 million ha, and OSR sowings have declined 6.1% to 1.31 million ha, they added.