EU Grains Mixed As Trade Eyes Russian Developments

Posted by Nogger - a legend in his own mind at 07:20 | Categorized as

20/05/15 -- EU grains closed mixed with May 15 London wheat down GBP0.35/tonne at GBP109.70/tonne, Sep 15 Paris wheat was EUR2.25/tonne firmer at EUR180.50/tonne, Jun 15 Paris corn was down EUR0.75/tonne at EUR154.00/tonne and Aug 15 Paris rapeseed rose EUR2.00/tonne to EUR359.75/tonne.

Fresh news of any great note was thin on the ground. Many traders are keeping an eye on developments in Russia, where spring plantings are behind schedule and hot and dry weather is in the 7-14 day forecast.

Agritel said that by Jun 1 temperatures could hit "around 30°C in Ukraine and middle of Russia and over 30° in Southern Russia." These would be record levels for so early in the year, they say. Rainfall is also in line to be below normal in the southern, central and Volga regions of Russia along with eastern parts of Ukraine, according to the latest forecasts.

Undeterred, the new Russian Agriculture Minister Alexander Tkachev is standing by his estimate for a 2015 grain crop of 100 MMT. That's only down a little on the 105.3 MMT produced last season, although he did add the caveat "provided funding isn’t cut" to his forecast.

Russian business daily newspaper Vermosti says that the Russian Agriculture Bank has asked the state for an additional 35 billion roubles (around $700 million) to provide loans to help fund spring planting. The newspaper story suggests than only 5 billion roubles of this extra funding is likely to be forthcoming from the government.

Spring grains in Russia have officially been planted on 18.8 million ha so far, down from 21.1 million this time a year ago. That's a little over 60% of the Ag Ministry forecast, and includes 6.0 million ha of wheat (45.7% of forecast), 6.1 million ha of barley (74.9%) and 2.3 million ha of corn (83.7%).

The Russian government intervention fund picked up a little under 14,000 MT of grain in today's purchase round, taking the total bought so far to around 910 TMT. Most of that was so-called grade 3 wheat at RUB9,925/tonne, which is the equivalent of around $199/tonne. New crop 12.5% Russian milling wheat is said to be offered around the $180-185/tonne region FOB the Black Sea.

The Russian Ministry said that the country's May 1 grain reserves stood at 19.1 MMT, a 21% increase on a year previously.

In Ukraine, their Ag Ministry are as similarly bullish on 2015 crop production prospects as their Russian "friends" this year, raising their estimate for total grain production by 2 MMT to 60 MMT, which again isn't down too much on last year's output of 63.8 MMT. Wheat will account for 21 MMT of that total, they say, up 1 MMT from their previous forecast. Winter crop development is around 3-5 days ahead of normal development, they say.

They say that the country has now exported 30.8 MMT of grains this season, including 15.9 MMT of corn, 10.3 MMT of wheat and 4.4 MMT of barley. The Ministry of Economic Development forecast full season Ukraine grain exports at 36.76 MMT, including 20 MMT of corn, 11.6 MMT of wheat and 4.4 MMT of barley.

Ukraine farmers have planted 6.5 million ha of spring grains, out of a government forecast of 7.0 million, they added. That total includes 4.1 million ha of corn, they said.

Bulgaria said that they'd exported 6.36 MMT of grains this season (to May 1), including 2.88 MMT of wheat, 1.74 MMT of corn and 0.55 MMT of barley.

Algeria tendered for 50,000 MT of optional origin wheat for August shipment.