EU Grains Rise As Egypt Buys French Wheat

01/10/14 -- EU grains closed higher to start the new month, with the Paris market garnering support from an ever weakening euro.

The day ended with Nov 14 London wheat up GBP0.80/tonne to GBP108.50/tonne, Nov 14 Paris wheat closing EUR2.00/tonne higher at EUR154.75/tonne, Nov 14 Paris corn was up EUR2.75/tonne to EUR140.75/tonne, whilst Nov 14 Paris rapeseed was EUR1.50/tonne firmer at EUR320.25/tonne.

The pound rose to a fresh 2-year high against the euro, nervous ahead of tomorrow's ECB meeting.

Another supportive factor for the Paris wheat market was Egypt's GASC booking two cargoes of French wheat for Nov 1-10 shipment, with Russian wheat comfortably out-priced.

It seems like Russia have crammed the bulk of their activity into the first quarter of the new season. ProZerno said that the country had exported around 3.6-3.7 MMT of grains in September, that's down from the record 4.7 MMT shipped out in August, but still the highest for that particular month in the last three seasons.

That takes Q1 (Jul/Sep) 2014/15 exports to an all time high 11.7 MMT, they said.

Ukraine's exports are also going well, with 8.347 MMT shipped out in Q1 of the new season. That total includes 4.764 MMT of wheat, 2.871 MMT of barley and 599 TMT of corn. The Ukraine Ag Minister raised his estimate for grain production there this year to an optimistic looking 64.4 MMT, which would beat last season's record 63 MMT if achieved.

Back to Russia, the Ag Ministry there said that the 2014 grain harvest had now reached 97.6 MMT off 86% of the planned area. The country has harvested 21.5 million ha of wheat (87.4% of plan), producing a crop of 58.3 MMT in bunker weight so far. They've also harvested 20.5 MMT of barley and 4.6 MMT of corn.

In addition, Russian winter grains have already been planted on an area of 11.4 million ha, 69% of plan, and up sharply from only 7.9 million ha this time a year ago.

On day two of the Russian Ministry's intervention purchase program they only managed to procure 6,885 MT of grain, down from 19,555 MT yesterday.

Domestic demand in Russia is strong due to increased livestock production due to tit-for-tat sanctions issued against Europe and the US. SovEcon estimate Russian grain demand at 71 MMT this season, up 4 MMT from a year previously.

Closer to home, FranceAgriMer reported that France had exported 784 TMT of barley in July, a 36% rise on a year ago. New customer China took 247 TMT of that total. FranceAgriMer estimate 2014/15 French barley exports at 5.625 MMT, up 11% from last season.

Here in the UK, feed wheat prices are now below GBP100/tonne in southern and central regions, according to a report on Agrimoney today. They say that Strategie Grains peg UK wheat carryover stocks at the end of the year at an unusually large 3.6 MMT, which they say is "more than the country has seen since the days of Intervention stores," as UK growers continue to baulk at selling at these levels.