EU Grains Setting Fresh Lows On Old Crop

28/01/16 -- EU grains traded mostly lower. Ideas that Russia's next move on wheat exports will be to axe the current duty entirely, are gaining momentum.

That has the remaining old crop London wheat contracts setting fresh contract lows.

At the finish, Mar 16 London wheat was down GBP0.40/tonne at GBP108.60/tonne, Mar 16 Paris wheat was EUR1.25/tonne lower at EUR164.50/tonne, Mar 16 corn fell EUR0.50/tonne to EUR154.50/tonne and Feb 16 rapeseed was down EUR2.50/tonne to EUR360.00/tonne.

Fresh news was limited. Feb 16 Paris rapeseed goes off the board tomorrow and May 16 becomes the new front month. The differential between those two contracts tonight is 0.9%.

It is interesting then to note that on Paris corn difference between the two nearby months is 5%, in Paris wheat it's 3.3% and in London wheat it's 2.2% - and in all these case this is comparing two old crop months with each other.

The market clearly thinks that if you were to put a gun to it's head and force it to carry anything then it would pick rapeseed right now (all the others are offering new crop premiums of between 3.4% in corn to 9.7% in London wheat).

News out late confirms weekly EU soft wheat export licences at 822 000 MT, up 61% on a week ago, taking the total granted so far to 14.845 MMT, down 11% versus 16.715 MMT last year at this date.

Barley exports of 147 TMT were also announced, taking the season to date total to 6.1 MMT, up 19.6% compared to 5.1 MMT this time a year ago.

Corn imports approved this week were 209 TMT, thankfully much lower than the 941 TMT worth passed a week ago.

Morocco tendered for 105 TMT worth of optional origin soft wheat. MDA CropCast today lowered their forecast for wheat production there this year to 7.0 MMT, down 12.5% on a year ago due to dryness.

Chinese think tank CNGOIC said that Chinese importers would probably ship in around 3.5 MMT of corn this year. They've already contracted around 1.2 MMT of that to be shipped in Q1, of which most will be of Ukraine origin, they say.

Russian officials forecast the 2016 grain crop there similar to last year (just like they always do at this time of year!) at 104 MMT. They said that spring plantings would be completed on 30.8 million ha.