EU Grains Close - Tuesday
16/08/11 -- EU grains finished mixed to mostly lower with Nov London wheat down GBP0.35/tonne to GBP164.50/tonne and with May falling GBP1.00/tonnne to GBP171.00/tonne. Nov Paris wheat was down EUR0.50/tonne to EUR199.00/tonne whist May12 was EUR0.75/tonne lower at EUR201.50/tonne.
It was a subdued session with liitle in the way of fresh news. UK inflation rose to 4.4% in July from 4.2% a month earlier, which in theory makes the chances of a domestic interest rate hike a bit more likely. That translates into a firmer pound, which closed at 1.6450 against the dollar, making UK exports a little less competitive.
Ukraine's trade ministry unveiled "preferential credit treatment for grain exporters, in an effort to kick-start shipments which reached only 338,000 tonnes in July," according to Agrimoney.com.
Despite the country's bumper harvest this season exports have lagged those of neighbouring Russia, who say they shipped 3 MMT out of the Black Sea in the first five weeks of the 2011/12 marketing year, dogged by red tape and governmental unwillingness to issue VAT refunds to grain exporters.
Anecdotal reports suggest that some of the "big boys" in Ukraine are starting to tire of the constant struggle to conduct their day to day business in the country.
Russia's Ag Ministry meanwhile say that the country has harvested 48.5 MMT of grains so far off just 39% of the planted area. They must be expecting one heck of an abandonment rate if you do the maths on that one to only be expecting a harvest of 90 MMT this year.
Yields so far have averaged 2.81 MT/ha they say, an increase of 33% on last year.
At home the wheat harvest has spread as far as the North East I hear, with growers generally more concerned with harvesting than marketing their crops. London wheat seems to have developed a reluctance to trade below GBP160/tonne, whilst Paris wheat appears to not want to break the EUR200/tonne mark, so I guess you could say we are rangebound for the time being.
