EU Wheat Up Again As Russian Rumours Circulate

02/12/14 -- EU grains finished the day higher, save for Paris rapeseed which was bogged down by falling soybean values which slipped back below $10/bushel in Chicago.

At the close Jan 15 London wheat was up GBP4.00/tonne to GBP136.50/tonne; Jan 15 Paris wheat was EUR1.75/tonne firmer at EUR190.00/tonne; Jan 15 Paris corn rose EUR1.50/tonne to EUR157.50/tonne; Feb 15 Paris rapeseed ended EUR1.25/tonne lower at EUR337.00/tonne.

Talk of some form of Russian export restrictions abound, with the government said to be set to meet in Moscow tomorrow to discuss introducing such measures.

Platts reported a flurry of buying interest pushing Russian 12.5% milling wheat prices up $8/tonne on yesterday, to $261.00/tonne FOB the Black Sea.

They also said that one rumour doing the rounds is that only vessels under the Russian flag might be allowed to load grain in Russian ports. Another is that certificates to load grain might only be granted to Russian-based companies, freezing out offshore registered businesses from exporting Russian grain.

The Russian rouble meanwhile suffered its largest one day loss since 1998 against the US dollar yesterday, and is now 60% down against the US currency so far this year. Russian farmers are extremely reluctant sellers whilst this sort of scenario pans out, with local prices steadily climbing on a daily basis as the rouble devalues.

All this potentially means more export business for Europe. The French were reported to have secured further feed wheat business into the south east coast of the US in the last couple of days. The euro sitting close to its lowest level against the US dollar since August 2012 will be helping them to get the sales.

At home the HGCA/ADAS reported UK winter wheat planting at 97% complete, with sowing of winter barley, oats and rapeseed already finished.

They said that crops are generally in good condition heading into winter, although black grass remains a problem as too does cabbage stem flea beetle in the OSR.

An interesting report in the Egypt Daily News said that the world's largest wheat buyer loses around 14% of its own domestic wheat crop every year through inadequate storage, transport, processing and also due to pests. They said that the country's total grain storage capacity is currently only 4.2 MMT, around half of their normal production and less than a quarter of their annual consumption.

This is something that the government are trying to address, to help reduce their wheat import needs.

Crop conditions in Russia are said to be "very tricky" by one contact over there. Meanwhile UkrAgroConsult said yesterday that more than a third of Ukraine's winter barley crop is in poor condition, and just 18.3% of it is in good condition.