Nogger's Blog

10/11/14 -- EU grains traded mostly higher, save for the expiring and technical front month Nov 14 Paris wheat, awaiting some direction from the November WASDE report from the USDA due out at 17.00 London time.

At the close Nov 14 London wheat was up GBP1.10/tonne to GBP118.40/tonne, Nov 14 Paris wheat was EUR4.25/tonne lower at EUR158.50/tonne, Jan 15 Paris corn was up EUR1.50/tonne to EUR148.50/tonne, whilst Feb 15 Paris rapeseed ended EUR0.50/tonne higher at EUR335.00/tonne.

The pound remains close to its lowest levels against the dollar since September 2013, as world money markets shift large volumes of cash to the US.

The euro meanwhile is close to its lowest against the US currency since August 2012.

Bank of America Merrill Lynch said that there was $17.5 billion worth of money inflows into US equity funds last week, following $20 billion worth the previous week. That's the largest amount of money inflows in a two week period since October 2013, they said.

It's not just the pound and euro that are weak against the US dollar. The Ukraine hryvna and Russian rouble have declined by 75% and 45% respectively against the US currency this year, according to Agritel. That, and lack of easily available credit, will make the purchasing of spring inputs an interesting challenge for farmers in both countries early next year.

The tentative ceasefire in eastern Ukraine was broken over the weekend, with the Donetsk area seeing its heaviest shelling in a month, according to Reuters. The grain markets haven't yet reacted to another escalation of tensions in the region.

It was business as usual for Ukraine seaports last week though. They shipped 666.5 TMT of grains abroad, up from 607.1 TMT the previous week.

They are certainly now starting to major on corn. Shipments of corn were 433.7 TMT last week, or 65% of the weekly total, up from 53% the previous week and only 12.1% for the week prior.

The Kazakh Ag Ministry said that 3% of their 2014 grain crop remains unharvested, although local farmers suggest that it may be much more than that. Whatever is left will probably now have to stay there until the spring.

Concerns remain over the health of the Russian winter-planted grain crop for the 2015 harvest, with one report today suggesting that only 50% of the crops in the Rostov region are in "satisfactory" condition.

Front month Nov 14 Paris wheat traded as low as EUR155/tonne in morning trade - the lowest since early October - ahead of the contract's expiry.

The French have a holiday tomorrow for Remembrance Day. It's also Veteran's Day in the US tomorrow, which means that government offices are closed, although the Chicago market is open, so other reports from the USDA like the weekly export sales will now be delayed a day to Friday.

Late in the day, the USDA upgraded their EU-28 2014 wheat production estimate from just under 154 MMT to 155.4 MMT, an 8.6% increase on 143.1 MMT a year ago. EU-28 2014/15 wheat export potential was left unchanged at 28 MMT, a 12% decline on last season's record.

Egypt's wheat import needs were revised 800,000 MT lower to 9.5 MMT, a 6.6% fall compared to 2013/14.