EU Grains See Modest Gains Heading Into Year-End

30/12/15 -- EU grains finished mostly a little higher on the day, although as the runners and riders approach the finishing line of the marathon that has been 2015, only rapeseed looks like ending the year dearer than it began it.

At the close of trading, Jan 16 London wheat was up GBP0.30/tonne at GBP113.90/tonne. In Paris, Mar 16 wheat was up EUR0.75/tonne at EUR174.75/tonne, Jan 16 corn rose EUR1.75/tonne to EUR146.75/tonne and Feb 16 rapeseed rose EUR0.50/tonne to EUR374.00/tonne.

Argentina announced the official removal of export quotas on wheat and corn today, just a week or two after duties were decreased to zero.

It's the depths of winter, or at least it should be in the northern hemisphere, so it's not unsurprising to hear of one or two areas of concern around the globe concerning winter wheat production.

The US Midwest and Great Plains are wet. "Precipitation the past several weeks has been more than twice the average in the Midwest and 3-4 times normal in the Great Plains," said Martell Crop Projections.

"Rivers in Missouri and Illinois are in “major” flood stage. A host of smaller rivers that feed into the Mississippi have moderate flooding. The influx of water flowing into the Mississippi River is causing it to overflow its banks. This is the main shipping route for corn, soybeans and wheat for export," they say.

Apart from perhaps causing some logistical problems, it is perhaps unlikely at this stage that we can legitimately start to discuss production losses here though.

Most of Europe remains warmer and wetter than normal. Whilst that wetter than normal pattern persists for almost all through the first 14 days of January, some models are now starting to split to a warmer than normal in the west and colder to much colder than normal outlook for countries in the east of Europe.

Again it's very early days, but this will be raising one or two eyebrows: Is winter finally about to bite? Flooding remains a concern at home where it has been excessively wet in the north and west.

The Black Sea is in for a cold snap too. with temperatures falling to -10° and -20° in the coming days, say Agritel. This could possibly cause some crop damage after a very dry autumn, they add.

The Ukraine 2015 grain harvest was estimated at 59.7 MMT, and 2015/16 ending stocks are seen falling from 10.96 MMT to 6.24 MMT as exports (particularly of corn) remain high despite sharply lower production in 2015.

Russia said that they'd exported 2.74 MMT of grains Dec 1-23. The largest buyer was Egypt (22%), followed by Turkey (16%) and Saudi Arabia (9%). Maybe that's why they aren't quite so keen to ban shipments to Turkey over the shooting down of the Russian jet over the Syrian border last month?

The Russian ruble hit a new all time low versus the US dollar today and traded at 73 to the US unit at one point. That says "let's export to whoever wants it and has the dollars to pay" for the time being.