EU Grains Mostly Higher To Start New Month

01/10/15 -- EU grains traded mostly a bit higher to begin the new month. It is also the beginning of a new quarter of course, and indeed the final one of 2015 (shockingly there's only 85 more sleeps until Christmas if you are interested!) As far as global stock markets go, Q3 just ended was the worst quarter in 4 years, say the BBC - led by China's Shanghai Composite falling 25% which dwarfs the FTSE 100's "mere" 7% decline.

At the close, Nov 15 London wheat was up GBP1.25/tonne at GBP116.85/tonne. In Paris, Dec 15 wheat was EUR1.75/tonne higher to EUR176.25/tonne, Nov 15 corn was up EUR0.50/tonne at EUR161.75/tonne and Nov 15 rapeseed was EUr1.25/tonne firmer at EUR368.75/tonne.

Russia's new export duty on wheat kicks in today, and it's much less punitive than the one it replaces.

The rate at which a more than token duty now kicks in is raised from RUB11,000/tonne to RUB13,000/tonne. At today's exchange rates that's around $200/tonne. With current October FOB prices around the $187/tonne mark, rising to around $190-195/tonne for December shipment, Russian exporters are safe - for now.

Under the previous system, shippers exporting wheat in September were having to pay an export duty of around $7.50/tonne. As from today that drops to a nominal figure of around 15 cents/tonne.

All this is based on current exchange rates, which can of course alter. Any further significant fall in value of the rouble against the US dollar between now and the end of the year, and/or a rise in global wheat prices could set Russian exporters squealing again. For now though it looks like they may now begin to start beginning to catch up with last year's export pace.

Now that the duty has been lowered, Rusagrotrans estimated the country's 2015/16 wheat exports at 22-23 MMT (the USDA are already at 23 MMT themselves).

The Russian 2015 grain harvest is now said to stand at 94.9 MMT, some 2.1% down on this time last year. Final production is estimated at 100-103 MMT by the Russian Ag Ministry.

The Kazakh harvest meanwhile is almost 83% complete at more than 15 MMT. The Ukraine harvest is 77% done at 41.3 MMT.

Yesterday's revised EU Commission's production numbers were around the middle of the range of trade estimates. They place the soft wheat crop here down 2.8% on last year's record, with barley output down 2%. OSR production meanwhile will fall 13.2% and corn output will slump 22.4%, if their figures are correct.

The USDA are due to update us with their revised world crop production and demand/stocks estimates a week tomorrow.