EU Grains Rally As London Market Awakes

29/12/15 -- EU grains closed mostly higher, as London wheat awoke from it's holiday slumbers.

At the finish, Jan 16 London wheat was up GBP1.15/tonne at GBP113.60/tonne, Mar 16 Paris wheat was up EUR1.00/tonne to EUR174.00/tonne, Jan 16 corn was flat at EUR145.00/tonne and Feb 16 rapeseed was EUR0125/tonne higher to EUR373.50/tonne.

This wasn't ever going to be a day for fresh ground breaking news, and so it proved.

Choppy Jan 16 Paris corn, which expires next Tuesday had an uneventful day for once. having taken a bit of a technical pasting these past few thin sessions,

A bit of today's strength may have been derived from news and images flashing across the media of widespread flooding in the UK - particularly in northern and central areas.

This may be causing some crop damage and we must also consider the implications for the unusually large volume of old crop grain left on farm from the 2015 harvest.

Russia's Interfax News Agency said that the Ministry there are finalising production numbers for 2015, pegging this year's all important wheat harvest around 2 MMT higher than a year ago at 61.79 MMT.

Russia's 2015 corn crop is seen up 12.3% at 12.69 MMT, and this year's barley crop is being called 14% lower at 17.55 MMT.

The Russian Deputy PM has apparently re-iterated previous comments that the country do not intend to introduce restrictions on wheat sales to Turkey following the Nov 24 downing of a Russian military jet on the Syrian border.

Maybe they are still surprised by Argentina's clean sweep in last week's Egyptian wheat tender and don't want to close too many doors to themselves prematurely?

Wheat currently accounts for around 70% of their post-Soviet era record Jul 1 -Dec 28 grain exports.

Ukraine said that their winter grain harvest in 2016 might only total 20 MMT, as the country is forced to rely more heavily on spring sown crops next year.

Winter grain plantings in Ukraine were said to be the lowest in 10 years due to adverse weather conditions, with around 6 million ha of wheat and only 983k ha of barley going into the ground.

Bangladesh has announced a tender for the purchase of 50,000 MT of optional origin wheat with a closing date of Jan 10, according to Reuters.

India said that as of Christmas Day, wheat plantings there for the 2016 harvest - one of the earliest in the northern hemisphere - had caught up a little and were now 2 million ha behind those of a year ago at 25.94 million ha.

The market continues to meander along it's own sweet way. It looks like we will need to get into the New Year to get some "serious" new direction, but the weight of old crop stocks and fierce competition for new business would seem to point to a renewed downwards trajectory perhaps being more likely at the moment than an upwards one.