Paris Grains Rise On Bargain Hunting, Weak Euro

Posted by Nogger - a legend in his own mind at 12:41 | Categorized as

15/01/15 -- Paris grains trade higher on bargain hunting and the weak euro. The pound rose above 1.30 against the single currency, to it's highest level since 2008, following a ruling by the European Court of Justice which essentially paves the way for the ECB to introduce a Quantitative Easing programme with little in the way of a legal challenge.

At the close, Jan 15 London wheat was down GBP0.30/tonne at GBP125.50/tonne, Mar 15 Paris wheat was EUR2.25/tonne higher at EUR194.25/tonne, Mar 15 Paris corn was EUR1.25/tonne firmer at EUR158.25/tonne and Feb 15 Paris rapeseed was down EUR1.25/tonne at EUR354.00/tonne.

The Swiss Central Bank shocked the markets by abandoning it's 1.20 floor versus the euro today, with the Swiss Franc immediately surging 25% against the single currency.

Whilst the continued demise of the euro looks set to further boost EU wheat export hopes, it will do little to aid those from the UK though.

French analysts Strategie Grains raised their forecast for EU-28 soft wheat exports this season by 2.1 MMT to 29.3 MMT, which would now equal the record volume shipped out in 2013/14.

FranceAgriMer yesterday raised their estimate for French soft wheat exports to non-EU destinations by 300 TMT to 8.8 MMT, as they continue to pick up extra export business.

They said that the Russian export duty that comes into force on Feb 1 will keep an estimated 2.5-3.0 MMT of Russian wheat off the international market. That does of course however add a similar volume to be carried into next season's beginning stocks.

Despite an improved export outlook, FranceAgriMer estimated French soft wheat ending stocks at 4.34 MMT, which is still almost 2 MMT (or 85%) higher than at the end of last season.

French corn stocks were seen at 4 MMT following record production this year, that's up 74% versus 2013/14. Barley carryout was estimated at 1.5 MMT, an increase of 44% versus 12 months previously.

Ukraine said that the country had exported 20.2 MMT of grains so far this season, including 8.35 MMT of wheat, 7.85 MMT of corn and 3.72 MMT of barley.

APK Inform said that they expect Ukraine to export 32.9 MMT of grains in total in 2014/15, up 2.9% on last season, and 800 TMT above their previous estimate.

Wheat exports will rise 16.4% to 10.8 MMT, although corn shipments will drop 8.8% to 18.0 MMT, they added.

Egypt's GASC bought 240,000 MT of French wheat for Feb 19-29 shipment in their second tender of 2015. The price paid was substantially cheaper than that of only a week ago. There were no Russian or Ukraine offers, and Romanian wheat was priced out, as too was Argentine origin.

Libya are also tendering for 50,000 MT of optional origin milling wheat.