Nogger's Blog

19/01/15 -- With US markets closed for the Martin Luther King Day holiday this was never going to be a "Thriller in Manilla", more of a "Yawn in Benidorm" perhaps, and so it's proven to be so far in a day of quiet, low volume trade.

At the close, Jan 15 London wheat was down GBP0.50/tonne at GBP125.80/tonne, Mar 15 Paris wheat was EUR1.50/tonne lower at EUR196.00/tonne, Mar 15 Paris corn was EUr1.25/tonne easier at EUR158.25/tonne and Feb 15 Paris rapeseed was up EUR1.00/tonne to EUR358.00/tonne.

Fresh news was predictably light.

Egypt's Supplies Ministry said that it had enough wheat now bought to last it through to mid-May, which is well after their own local harvest begins. That said, these sorts of announcements are routine and don't rule them out of re-entering the market again soon, especially if prices dip further.

Last week's latest GASC tender purchased wheat for the end of February, which suggests that they will probably be back to buy Mar 1-10 shipment in the not too distant future.

They're reported to have bought a fraction over 3 MMT of wheat on the international market for 2014/15 shipment so far this season, which is around 1 MMT less than they'd purchased this time a year ago.

For the whole of last season they finished up buying 5.46 MMT of wheat on the international market, so even if they were to end 2014/15 buying a million tonnes (or even more) less than they did then, there's probably still a fair bit of interest to come from them before the season ends.

French wheat would remain the red-hot favourite to pick up the majority of that business.

Russia said that they'd exported 588 TMT of grains in the first 15 days of the month. That's only around a third of the 1.718 MMT exported in the first 17 days of December.

Exports would therefore seem to have slowed up sharply. Although adverse weather conditions can be blamed for at least some of this decline, it's an interesting statistic nonetheless, given that shippers are supposed to be trying to rush through existing commitments before the Feb 1 export duty kicks in.

Wheat accounts for 495 TMT, or 84% of the total shipped out this month so far.

Russia's 2014/15 season to date grain exports are now 21.571 MMT, a rise of 31.6% on a year ago. Wheat accounts for 16.852 MMT of that volume, or 78% of the total. Barley adds a further 3.26 MMT and corn an additional 1.183 MMT.

Looking ahead, "wheat prospects in Europe (for the 2015 harvest) are not as favourable as last season. This is likely due to unseasonably warm temperatures in the autumn growing season. September-November temperatures were 2-4 C (4-7 F) above normal, encouraging high evaporation and sapping field moisture," suggest Martell Crop Projections.

"Mid-November satellite images reveal sub-par vegetative health in all 3 of the top wheat producing countries of France, Germany and the United Kingdom, compared to last year," they say.

Topsoil moisture has increased sharply with heavy rainfall in northern Europe in the last 30 days however, they note. Conversely, countries in south eastern Europe like Hungary, Romania and Bulgaria have turned drier after widespread flooding in the autumn, they add.

In other news, India said that it had planted 30.4 million hectares of wheat for the 2015 harvest, which is around 1 million less than a year ago at this time.