EU Grains Mostly Higher, But Seemingly Rangebound

29/10/15 -- EU grains traded mostly higher Thursday. French markets continue to garner support from a weak euro, and the outlook for it to depreciate further. That closed at little more than 1.09 versus the US dollar last night and near 1.40 against the pound.

At the close, Nov 15 London wheat was up GBP0.65/tonne at GBP114.95/tonne. In Paris, Dec 15 wheat was EUR2.75/tonne firmer at EUR180.75/tonne, Nov 15 corn was EUR1.50/tonne higher at EUR166.50/tonne and Nov 15 rapeseed (which has been displaying some erratic behaviour this week prior to going off the board tomorrow) jumped EUR5.25/tonne to EUR375.75/tonne.

London wheat remains stuck around the GBP115/tonne area, and hasn't closed outside of GBP112.50-117/tonne in more than a month, note the HGCA.

"There hasn’t really been sufficient news to impact prices or set a clear direction recently. However, the recent strength of sterling against the euro has meant that UK feed wheat futures haven’t benefitted from some of the recent gains in Paris Dec-15 wheat futures," they said.

Dec 15 Paris wheat meanwhile hasn't closed outside of the EUR175-181/tonne range so far this month either.

Egypt's GASC were back in the market for wheat for Dec 1-10 shipment. They finished up buying two cargoes of French and one each of Polish and Romanian wheat.

Interestingly on an FOB basis the cheapest offer was the Polish material (at $195.74/tonne), followed by French (at $197.64/tonne and $198.24/tonne) and the most expensive ones were all Russian! On a C&F basis Romanian wheat was the cheapest, by virtue of a much lower freight rate.

Reuters reported that Algeria are in the market for at least 50,000 MT of hard wheat for Dec/Jan shipment, and also that Jordan had once more cancelled their tender for 100,000 MT of optional origin hard wheat due to lack of offers and then immediately re-tendered for the same quantity again. Trade sources say that the contract criteria for the Jordan business is too stringent for many, which explains seller reluctance.

The Russian 2015 wheat and barley harvests are both just about over at a reported 63.8 MMT and 18.2 MMT respectively (in bunker weight). The corn harvest is ongoing at 73.2% done at 10.2 MMT with yields of 5.10 MT/ha being some 12% ahead of last year.

Russian winter grain plantings are now said to be complete on 91.6% of the planned area at 15.7 million ha, some 600,000 ha less than this time a year ago.

The Russian weather forecast is colder and drier than normal through to the end of the month. After that dryness continues, but there is a chance for warmer than normal temperatures creeping in during the 8-15 day forecast, according to the CMC weather model at least. The GFS model keeps things cold right through until the middle of November.

Ukraine said that they'd exported 25.9 MMT of grains in the first 9 months of 2015, a 13.6% increase on a year ago. The Ukraine Ag Ministry said that winter wheat plantings there were now 86% complete, with winter barley sowings at 67% and winter rapeseed 76% done.

The IGC were out this afternoon with their latest global grain supply and demand report.

In that they trimmed the size of the global 2015/16 wheat crop by 1 MMT, and knocked 2 MMT off world ending stocks. World corn production was increased by 3 MMT, and carryout upped 1 MMT however, pretty much cancelling each other out.