EU Grains Higher On The Day, Mixed For The Week/Month

27/02/15 -- EU grains closed uniformly higher on the day, and mixed for the week. Paris wheat continues to perform better than its London counterpart, due to strong export demand aided by the weak euro.

At the finish, Mar 15 London wheat was up GBP0.65/tonne at GBP116.80/tonne; Mar 15 Paris wheat was EUR2.00/tonne higher at EUR187.50/tonne; Mar 15 Paris corn was EUR1.00/tonne firmer at EUR149.50/tonne; May 15 Paris rapeseed was EUR5.75/tonne higher at EUR368.25/tonne.

For the week, London wheat fell GBP3.70/tonne, Paris wheat was up EUR1.75/tonne, corn fell EUR1.75/tonne and rapeseed rose EUR10.25/tonne.

For the month of February, London wheat lost GBP5.30/tonne, Paris wheat gained EUR2.00/tonne, corn fell EUR4.25/tonne and rapeseed added EUR18.00/tonne.

Sterling closed at another new highest since late 2007 tonight, close to 1.38 versus 1.33 at the end of last month, which helps explain why London wheat is down and Paris wheat up during the course of the month.

The weak euro helped EU soft wheat export licences top 900,000 MT for a third time this marketing year for the week ending Feb 24. Total soft wheat exports this season are now 20.8 MMT, which is 600,000 MT ahead of this time last year.

Reports out of Ukraine suggest that growers there will probably plant a similar spring grain area to that of a year ago, but that yields will likely be lower due to a decline in fertiliser and plant protection applications due to in some cases a lack of availability, and in others simply cost. A year ago you needed less than 10 Ukraine hryvnia to buy one US dollar, today you need more than 33 of them.

Russian growers also look set to face similar issues with regards to spring plantings. Despite government assurances that short-term loans are available to fund plantings and other farm inputs at subsidised rates, private sources say that getting access to these funds is extremely difficult "unless you are Putin's best mate"!

The Russian Ag Ministry said that the country had exported only 322,000 MT of wheat Feb 1-25, a 57% fall versus the same period in 2014, due to the new export duty.

Total grain exports this season might reach 28.5 MMT, of which 20 MMT will be wheat,they said. Exports so far this season are at 24.2 MMT, including 18.8 MMT of wheat.

The Russian farmers' reluctance to sell his grain does however mean that 2014/15 ending stocks could be unusually high, at around 17 MMT including 8 MMT of wheat, the Ministry estimate - even if most of it will be in private hands rather than the government's intervention stores.

FranceAgriMer said that 97% of the French winter wheat crop is tillering, up 2 points from a week ago and 4 points ahead of last year. Winter barley is 99% tillering, the same as a year ago. Spring barley planting is already 23% complete, up 13 points in a week and 20 points ahead of this time last year.

Winter wheat rated good to very good fell one point from last week to 90%, although that's well ahead of only 73% this time last year. Winter barley rated good to very good was also seen down a point on last week to 90% versus 72% a year ago.