EU Wheat At 7-Week Highs, Rapeseed At Best Levels Since July

Posted by Nogger - a legend in his own mind at 08:33 | Categorized as

26/02/14 -- EU grains closed higher, with both Mar 14 London wheat and Mar 14 Paris wheat managing the highest close for a front month since Jan 8. Paris wheat did so by finally managing to break through the EUR200/tonne barrier too. The casino that is Paris rapeseed meanwhile closed at the best levels on a front month since last July.

Mar 14 London wheat closed GBP0.75/tonne firmer at GBP156.75/tonne, whilst new crop Nov 14 was also GBP0.75/tonne higher at GBP148.25/tonne. Mar 14 Paris wheat closed EUR1.25/tonne higher at EUR200.25/tonne, Mar 14 Paris corn was up EUR0.25/tonne at EUR172.50/tonne, whilst May 14 Paris rapeseed was EUR4.75/tonne higher at EUR394.50/tonne.

Note that open interest in the Mar 14 London wheat contract is only 5 lots and the contract didn't actually trade today.

A rise in tensions between Russia and Ukraine got the market a little nervous, after government buildings in the Crimean capital of Simferopol were seized by armed men and the Russian flag was raised.

The flood of cheap corn pouring out of Ukraine has been one of the main factors keeping wheat prices in Europe under pressure. The Ukraine Stats Office had earlier reported that the country exported a record 3.9 MMT of corn in December.

Spring grain planting season is just about getting underway in Crimea and was expected to progress rapidly across the rest of the country in the coming weeks. The stand-in Ukraine Ag Minister had earlier forecast a 2014 grain crop of 62 MMT, only 1 MMT below last year's record.

The Ukraine Hydrometeorlogical Centre said that winter grain replanting would be "less than average" at around 6-10%, with the best conditions being displayed in the normally more productive west of the country. Here "no more than 5%" of winter grains will need replanting, they said.

Given the relatively benign winter and low levels of frost damage, they see winter grain yields up 10-20% compared to last year.

Spring grain planting is also said to be underway in Russia's Krasnodar district, where daytime temperatures of 10-12C are providing "ideal seeding conditions" according to Agritel.

Almost all of Europe, as well as the FSU, are forecast to enjoy temperatures warmer to much warmer than normal in the Mar 5-13 timeframe, which should allow good progress to be made with fieldwork there too.

Extremely cold temperatures in the Midwest and ongoing drought in the Southern Great Plains, where virtually no rain has occurred for over 2 months, puts US winter wheat at risk, say Martell Crop Projections. The current deep freeze, with "brutally cold temperatures" as low as -15 to -30 F, will also cause short-term logistical problems and restrict the movement of grains.