Nogger's Blog

30/01/15 -- EU grains traded mixed on the day, but all significantly lower across the board for the week.

At the close Mar 15 London wheat was down GBP1.15/tonne at GBP122.10/tonne, Mar 15 Paris wheat was EUR2.25/tonne easier at EUR185.50/tonne, Mar 15 Paris corn was up EUR0.75/tonne at EUR153.75/tonne and Feb 15 Paris rapeseed went off the board EUR4.25/tonne higher to EUR350.25/tonne.

For the week, Mar 15 London wheat fell GBP6.20/tonne, Paris wheat lost EUR10.00/tonne, corn dropped EUR5.50/tonne and rapeseed was down EUR6.25/tonne.

For the month of January, on a front month basis, London wheat shed GBP9.60/tonne. In Paris, wheat fell EUR9.50/tonne, corn slipped EUR3.00 and rapeseed actually rose EUR2.50/tonne.

There hasn't really been anything especially bearish out this week, it's just that there seems to be plenty of everything around, and what buying interest there is out there is being fiercely fought over.

Brussels confirmed that they'd issued 661 TMT worth of soft wheat export licences this past week, taking the season to date total to 16.7 MMT, a modest 3.5% fall on where we were this time a year ago. As a reminder the USDA currently sees EU all wheat exports down 6% in 2014/15, so we are on track to beat that total, if not get close to matching last season's record full campaign volume of 31.925 MMT.

Brussels also granted 329 TMT worth of barley exports, taking the seasonal total so far to 5.1 MMT, which is more than 6% up compared with this time a year ago. That's not a bad effort, even if the USDA estimate is for EU barley exports to jump 36% in 2014/15 to 6.7 MMT, at least we are past three quarters of the way towards achieving that target.

The EU also granted 76 TMT worth of corn import licences this past week. That takes the season to date total to 5.2 MMT, down almost 27% on this time last year. The EU are expected to import 7 MMT of corn this season, which is less than half the near 16 MMT shipped in in 2013/14.

In a surprise move, Russia trimmed 2 percentage points off interest rates today, down from 17% to 15%, because it says that inflation is stabilising. The Russian Economic Ministry forecast recently that inflation wouldn't peak until March or April, and coincidentally at around 15-17% versus 11.4% at the end of 2014.

The Russian Central Bank confirmed that capital outflow in 2014 was greater even than during the 2008 financial crisis, and up 250% versus 2013.

The rouble fell to new lows versus the US dollar and euro on the news. That's unlikely to encourage Russian farmers to be keener sellers now than they were previously, as they sit on their remaining grain stocks as a hedge against the falling domestic currency.

Weekend reports suggest that several vessels loaded with wheat are "stuck" at Russian Black Sea ports awaiting customs clearance in what looks like a deliberate ruse on behalf of the government to delay their departure long enough so that exporters have to pay the new Feb 1 export (or should that be extort?) duty.

Neither the exporters, nor the Egyptian buyers, are likely to be too happy about that.

Ukraine said that they'd exported 21.543 MMT of grains so far this season, including 8.58 MMT of wheat, 8.93 MMT of corn and 3.80 MMT of barley.