Little Change In Sentiment As EU Grains Drift Lower To Start Month
01/12/15 -- EU grains drifted mostly lower. It may have been a new month, but there was little sign of a change of sentiment.
At the close, Jan 16 London wheat was down GBP0.25/tonne at GBP113.15/tonne, Dec 15 Paris wheat was down EUR0.25/tonne at EUR176.50nne, Jan 16 Paris corn was EUR0.25/tonne lower at EUR165.25/tonne, whilst Feb 16 Paris rapeseed fell EUR0.75/tonne to EUR383.25/tonne.
Fresh news was relatively scarce. The trade is debating what effect a "trade war" between Russia and Turkey might have on the grain markets. On the one hand, Turkey might need some new suppliers to fulfil existing and potential new contracts that would have gone Russia's way.
Talk is that some of these wheat requirements might cost $30-40/tonne more on the open world market now.
However, Russian sellers will now also need some new buyers for what they already have on contract to Turkey, so there could be some downwards pressure brought to bear too. IKAR said that Russian wheat prices FOB the Azov Sea were down last week on ideas that new, non-Turkish, buyers would now be needed.
Turkey are said to have imported 4.2 MMT of Russian wheat and 1.2 MMT of Russian corn in 2014/15.
Prime Minister Dmitry Medvedev has apparently signed an decree approving economic sanctions against Turkey following the "unprovoked" downing of a Russian jet over Syria last week.
It does not yet seem that these sanctions currently include grain, but traders on both sides are already said to reluctant to enter into fresh deals with each other for fear that this is simply locking in trouble to come further down the line.
We shall have to wait and see how this one pans out.
In other news, concerns remain over late winter plantings and crop health in Ukraine in particular. The Ukraine Ag Ministry said yesterday that only 649k ha (70%) of the intended winter rapeseed area had been sown. Agritel today said that just 385k ha of this is in a favourable condition.
Morocco are tendering on the local market for 150,000 MT of domestic soft wheat.
ABARES cut their forecast for the Australian wheat crop by 1.3 MMT from their previous estimate to 24.0 MMT, although that's still 0.3 MMT up on a year ago. They see this year's Australian barley crop up 2% at 8.2 MMT, and have canola production 14% lower at 3.0 MMT.
