London Wheat Rises, Helped By Weaker Sterling

25/03/15 -- EU grains closed mixed, with London wheat higher and the Paris grains lower.

At the finish, May 15 London wheat was up GBP1.05/tonne at GBP123.65/tonne; May 15 Paris wheat was EUR1.25/tonne lower at EUR191.25/tonne; Jun 15 Paris corn was EUR0.75/tonne easier at EUR162.00/tonne; May 15 Paris rapeseed was down EUR4.00/tonne at EUR366.00/tonne.

London wheat got a helping hand following the news that UK inflation had fallen to zero, keeping thoughts of interest rate rises on the back burner, and putting the pound under pressure. Sterling is likely to be in for a bit of a bumpy ride in the run up to the general election on May 7.

Spring grain plantings in Russia are said to be complete on 731k ha, or 1.4% of plan. Progress in Ukraine is said to be already 30% done.

Russia’s Ag Ministry estimated winter grain losses at 16.8%, down from 21% previously.

The head of the Russian agrometeorological centre told Bloomberg that 9% of winter grains were in a bad condition versus 3% a year ago.

The debate over Russian farmers' ability to fund the spring planting programme continues. Bloomberg reported that farmers face "colossal damage" without timely funding. The government say that the effective loan rate for Russian spring sowing is only 3-7%. Private reports suggest that it is in fact many times this.

The Russian export duty on wheat means that intervention purchases are picking up. The government bought 30,510 tons of intervention grain today, taking the total bought since purchases began on Sep 30 to 473,290 MT. That's still well below the government target though.

Iran bought 80,000 MT of German and Black Sea wheat for April shipment in a tender.

The Canadian Wheat Board estimated the global wheat crop at 703.4 MMT this year, down nearly 3% from 724.8 MMT in 2014.

They see no sign of a let up in European wheat exports in 2015/16, predicting these to rise to a record 32.35 MMT versus the estimated 31.5 MMT this season. That would place Europe at the top of the global wheat export table for another year.

Ukraine's 2015/15 wheat exports will fall 12% to 9.7 MMT next season, and Russia's will drop a similar percentage to 17.4 MMT, they predict.

The Indian Ag Ministry said that this year's expected record, or near record, wheat crop may in fact come in significantly lower than hoped for due to late rain and hail damage immediately prior to harvesting. An area of 12.1 million ha (40%) of the planted 30.6 million ha has been affected, with rains up to 3 times more than normal having fallen between Mar 1-18, they said.

I'm a bit late with my reports this morning, apologies. It's my birthday!