EU Grains Mixed As Russian Deadline Approaches
20/01/15 -- EU grains closed mixed. Despite US markets re-opening after yesterday's Martin Luther King Day holiday, trade remained relatively subdued.
At the close, Jan 15 London wheat was up GBP0.45/tonne at GBP126.25/tonne, Mar 15 Paris wheat was EUR0.50/tonne higher at EUR196.50/tonne, Mar 15 Paris corn was EUR1.50/tonne lower at EUR156.25/tonne and Feb 15 Paris rapeseed was down EUR3.25/tonne at EUR354.75/tonne.
Russia only managed to pick up around 7,000 MT of wheat at today's latest intervention purchase round. That takes the total bought so far this season to a relatively miserly 320 TMT out of a government target of at least 3 MMT, as growers continue to hold onto their stocks as a hedge against inflation and the falling rouble.
There are now rumblings of the Russian government "withdrawing state support" from those farmers who continue to hoard their grain stocks.
The Deputy Russian PM also said that further and "more radical proposals" could be introduced to curb wheat exports should the new Feb 1 duty prove to be not enough to curb foreign sales, and encourage growers to sell their stocks to the intervention fund.
The latest customs data shows that Russia exported less than 600 TMT of grains in the first half of January, down sharply from around 1.5 MMT in the corresponding period in December. Whilst this can partly be attributed to adverse weather conditions and the extended Orthodox Christmas celebrations, certainly some of this slow down can also be blamed on difficulties in obtaining the necessary customs clearance.
The combined effect of these new developments is likely to cap Russian wheat exports at around 18 MMT this season, which is around 4 MMT lower than original expectations. (The USDA themselves were forecasting Russian wheat exports of 22 MMT in 2014/15 as recently as December).
So this potentially leaves an extra 4 MMT of global wheat demand to switch to other origins, of which Europe is expected to pick up the lion’s share of the business.
In other news, Kazakhstan said that their Jan 1 grains stocks were 13.15 MMT, of which 11 MMT was wheat.
Ukraine said that growers there had planted 8 million hectares of winter grains, including 6.8 million ha of wheat. In addition they'd also planted almost 900k ha of winter OSR, said the Ag Ministry.
Around 3% of winter grains haven't yet emerged, and 18% of what has emerged remains in a weak/thinned state.
Jordan are tendering for 100,000 MT each of wheat and barley for Jun/Jul shipment.
