EU Grains Mixed As Egypt Buys Mostly Russian Wheat

27/02/14 -- EU grains were mixed, although mostly a little lower, as generally sideways trade continues. Paris wheat did at least manage to hold above the EUR200/tonne mark on front month Mar 14 for a second day despite French wheat missing out in the latest Egyptian tender.

Mar 14 London wheat ended GBP0.65/tonne lower at GBP156.10/tonne, and with new crop Nov 14 GBP0.35/tonne easier at GBP147.90/tonne. Mar 14 Paris milling wheat was EUR1.50/tonne higher at EUR201.75/tonne, Mar 14 Paris corn was unchanged at EUR172.50/tonne and May 14 Paris rapeseed added EUR2.50/tonne to post a fresh 7-month closing high of EUR397.00/tonne.

Egypt's GASC bought 295 TMT of wheat in their tender. It was mostly Russian origin that won the day, although they did also book one cargo of Romanian wheat. It was interesting to note that there were plenty of Russian offers this time around, and at cheaper money than in GASC's last tender, whilst French and US wheat bids were higher. The cheapest French offer, including freight, was more than $10/tonne above the winning Russian bids.

Rusagrotrans said that they expect Russia's grain exports to rise to around 1.3 MMT in March, up from 1.15-1.2 MMT in February, noting that weakness in the rouble is enabling Russian wheat to compete favourably with US and European offers.

The Russian Ag Ministry said that the country had exported 18.25 MMT of grains in the Jul 1 - Feb 19 period, an increase of a third on a year ago.

APK Inform said that 70% of winter grains in the northern Ukraine Sumy region were rated in good condition, with the remaining 30% all satisfactory. Spring barley is being actively planted in the Crimea region despite the recent troubles, they added. The local Ag Department said that 82% of winter grains in the north eastern region of Kharkiv were in good to satisfactory condition.

The Ukraine hryvnia sunk to a new low of 10:1 against the US dollar. Whilst that will help their competitiveness in the short-term, it may mean farmers cut back on dollar denoted imports of fertilisers and agrochemicals later in the year, potentially harming yields for the 2014 harvest.

Brussels announced that they'd cleared 932 TMT of soft wheat export licences this past week - the largest weekly total of the 2013/14 marketing year so far. That takes the cumulative total for the year so far to 20.2 MMT versus only 13.1 MMT this time a year ago.

The International Grain Council upped their forecast for the 2013/14 world wheat crop by 1 MMT to a new record 708 MMT. They also said that the 2014/15 global wheat crop will fall to 696 MMT on lower yields.