EU Grains End Higher For The Week, Sterling Weakness Helps London Wheat

14/11/14 -- EU grains were mostly higher on the day and all were higher for the week.

At the close Nov 14 London wheat was up GBP0.80/tonne to GBP124.00/tonne, Jan 15 Paris wheat was EUR0.50/tonne higher at EUR176.50/tonne, Jan 15 Paris corn was up EUR1.00/tonne to EUR153.00/tonne, whilst Feb 15 Paris rapeseed ended EUR1.50/tonne lower at EUR335.75/tonne.

On a front month basis London wheat gained GBP6.70/tonne during the course of the week, with Paris wheat up EUR13.75/tonne (although last week's marker was set by the Nov 14 contract which expired on Monday), corn up EUR6.00/tonne and rapeseed EUR1.25/tonne firmer.

The sudden weakness of the pound across the board has also been a notable feature this week. Whilst sterling has been in a downtrend against the firm US dollar since July when it peaked at around 1.72, its been hovering around the 2-year high 1.28 mark against the euro in recent weeks.

That's all changed this week, following comments from the BoE governor Carney that suggested that a UK interest rate rise is potentially much further away than the market anticipated.

On the week, the UK currency fell from 1.5877 to 1.5665 against the US dollar, and was down from 1.2744 to 1.2510 versus the euro.

This potentially helps to make UK wheat more competitive on the export front, as well as increasing the cost of dollar/euro denominated imports.

FranceAgriMer said that the French corn harvest is now 90% complete, up from 79% done a week ago and way ahead of only 56% this time last year.

Winter wheat planting is 96% complete versus 91% last week and 81% a year ago. A quarter of the crop is at the early tillering stage versus 16% a year ago. They said that 94% of the crop is in good to very good condition compared to 86% a year ago.

French winter barley is fully sown versus 97% this time last year and 45% is at the early tillering stage compared to 34% a year ago. Crop conditions are rated 94% good to very good against 85% this time last year.

The UK has imported 301 TMT of corn in the Jul-Sep period, a 22% decline on a year ago, but still an historically large volume, customs data shows. France is the largest supplier to date, being responsible for 118 TMT of that total.

Black Earth Farming became the latest organisation to flag up potential problems with Russia's wheat crop for 2015. After a wet spring/early summer, which saw the 2014 crop through to harvest with decent yields, it's turned very dry.

"On about 70% of our area the cumulative rainfall for our farms this year to date is now below 2010 levels and very substantially below seven-year averages," they said according to a report on Agrimoney.