EU Grains Mixed, Outside Markets Weigh

05/01/16 -- EU grains finished mixed. Wheat was generally lower and corn and rapeseed a touch higher, reversing some of yesterday's losses in mini "Turnaround Tuesday" style.

At the close of trading, Jan 16 London wheat was down GBP1.00/tonne at GBP110.90/tonne. In Paris, Mar 16 wheat fell EUR0.25/tonne at EUR170.75/tonne, Mar 16 corn rose EUR0.75/tonne to EUR162.275/tonne and Feb 16 rapeseed jumped EUR2.750/tonne to EUR373.25/tonne.

Chinese shares opened 3% lower, in follow-through trade from yesterday, but had recovered somewhat to close around unchanged at the finish. In late afternoon trade, London's FTSE 100, the French CAC 40 and German DAX were all showing small net gains, even if these were of less than 1%.

Media reports suggest that three French wheat vessels of a combined 180,000 MT (one cargo scheduled for shipment Dec 11-20 and two for Dec 21-31) are still sat off the port of Dunkirk awaiting letters of credit from Egypt's GASC.

This appears to confirm rumours of a lack of currency reserves in Egyptian government, and explains why GASC extended the terms of it's purchases to include letters of credit being allowed to be opened up to 180 days after signing contracts recently.

Ethiopia are tendering for 70,000 MT of optional origin wheat (with Black Sea material probably the favourite). They African nation has bought around 1 MMT of wheat since October after failed rains spoiled their own harvest.

UkrAgroConsult said that Ukraine would export 14 MMT of wheat this season, up from a previous estimate of 13 MMT, although still 1.5 MMT less than the USDA currently predict.

Sharply lower winter plantings for next year's harvest however mean that 2016/17 Ukraine wheat exports will fall to 8.5 MMT, and possibly less, they said. Ukraine exported around 7.25 MMT of wheat in the first quarter of 2015/16 alone.

Fresh news out of Russia is scant as they remain largely closed in observation of the orthodox Christmas/New Year holidays.

We might be able to call today a minor correction, but the overall trend most definitely remains lower.

Shell, among others, continuing to predict crude oil prices possibly still having some further significant downside in 2016 won't help commodities in general.