EU Grains Mixed, Problems Loom For Russian And Ukraine Growers

05/02/15 -- EU grains closed mixed, with little in the way of fresh news to get your teeth into ahead of next Tuesday's USDA WASDE report.

At the close, Mar 15 London wheat was GBP0.20/tonne firmer at GBP123.65/tonne, Mar 15 Paris wheat was EUR0.50/tonne higher at EUR187.00/tonne, Mar 15 Paris corn was up EUR1.00/tonne at EUR155.50/tonne and May 15 Paris rapeseed rose EUR5.50/tonne to EUR357.75/tonne.

The FAO lowered their forecast for the global wheat crop in 2014/15 by 1 MMT to 724 MMT, and cut ending stocks a similar amount to 192 MMT. World corn production was unchanged at 1020 MMT and ending stocks were reduced by 4 MMT to 208 MMT.

The Russian Ag Minister said that the country would export "no more than 28 MMT" of grains this season. Exports to Jan 28 were said to be 22.7 MMT.

The USDA's FAS in Russia estimated exports this year at 27.4 MMT, down from a previous forecast of 30 MMT. Wheat will account for 19.5 MMT of that total versus the 22 MMT that they estimated previously. Barley exports will total 4.4 MMT and corn exports 2.4 MMT, they added.

One Russian official said that 21% of the nation's winter grains were in poor condition, including 29% of crops in the main central and southern regions.

Russian AN prices are said to have risen 30% between September and December, due to raging inflation and the plunging rouble.

Mind you, inflation of "only" 11.4% at the end of December would be a dream if you were farming in Ukraine. Inflation there is now running at 24.9%, said Agritel.

Farmers in both countries will struggle to afford to purchase their spring inputs this year more than ever before.

Informa Economics forecast the 2015 Russian wheat crop at 55 MMT, down 8.3% on last year. Ukraine's wheat output will fall 12.5% to 21 MMT, they also said.

Strategie Grains estimated the EU-28 rapeseed crop at 21.5 MMT later this year, a drop of 11% compared with 2014.