EU Grains On Modest Offensive To Start The Week

Posted by Nogger - a legend in his own mind at 12:31 | Categorized as

07/12/15 -- EU grains began the week on the offensive, albeit modestly so, with most positions closing higher.

At the finish, Jan 16 London wheat was up GBP2.00/tonne at GBP113.25/tonne, Dec 15 Paris wheat was down EUR1.25/tonne to EUR171.75/tonne (although other months closed higher), Jan 16 corn was unchanged at EUR165.25/tonne and Feb 16 rapeseed was EUR1.50/tonne higher to EUR382.50/tonne.

London wheat still remains rangebound - we haven't seen a front month close outside the GBP110-120/tonne zone in nearly 4-months.

Meanwhile Paris wheat trades mostly in the EUR170-180/tonne range, save for one or two short-lived attempts to break out to the upside early in November. Similar comments apply to corn, with the market only managing two daily closes above EUR170/tonne since the 2015 harvest began, with that commodity seemingly also stuck in a EUR10/tonne range between EUR160-170/tonne.

Paris rapeseed keeps threatening to test recent highs around the EUR385/tonne region, and perhaps looks the most likely of the bunch to move onto new and higher ground before too long. A bit more help from soybeans wouldn't go amiss to help achieve that target.

Meanwhile, feed demand remains "as quiet as I've ever known it for this time of year" one trader commented to me today, so we can't go expecting too much assistance from that quarter.

Russia's grain exports via seaports slackened off last week, down from 471.5 TMT the previous week to 370.2 TMT as of Sunday, a 21.5% reduction. Wheat accounted for 86%, or 319.4 TMT of that total.

The same trend was seen in Ukraine, with exports via seaports there down 19.4% week-on-week to 322.2 TMT. That includes 109.3 TMT of wheat (34%) and 212.9 TMT (66%) of corn. Interestingly neither Russia or Ukraine exported any barley via their seaports  last week.

Delays to both Russian and Turkish vessels getting in and out of each others waters/ports keep getting reported.

The Ukraine Ag Ministry said that winter grains there had emerged on 83% (or 5.6 million ha) of the planted area, with a further 1.1 million ha has yet to germinate. They say that 66% of what has emerged is in a good to satisfactory condition. That leaves 1.9 million ha officially rated as "weak/thinned".

Those figures don't include winter rapeseed. Germination there is placed at 564.6k ha, or 87% of the planted area, Crop ratings are similar at 67% good/satisfactory and 33% weak/thinned.

Jordan tendered for 25,000 MT of durum wheat for Jan 1-25 shipment. They are also said to have agreed to buy 400,000 MT each of hard wheat and feed barley from a UAE seller for delivery over the next 2 years. They regularly find their international tenders meet with few, and sometimes no offers at all due to their stringent contract requirements.