EU Grains Mostly HIgher, Indian Wheat Situation Warrants Monitoring

02/09/16 -- EU grains finished mixed, but mostly a touch higher.

The day ended with Nov 16 London down GBP0.25/tonne at GBP122.75/tonne, Sep 16 Paris wheat was EUR0.50/tonne firmer at EUR158.00/tonne, Nov 16 corn was up EUR1.50/tonne at EUR162.50/tonne and Nov 16 rapeseed rose EUR3.50/tonne to EUR377.00/tonne.

For the week that puts London wheat GBP3.00/tonne easier, with Paris wheat down half a euro, corn down EUR1.75/tonne and rapeseed EUR2.75/tonne firmer.

London wheat took the brunt of declines today, and this week, on the back of a firmer sterling which hit one month highs against both the euro (1.1938) and US dollar Friday (1.3350).

London wheat's fortunes have been much more closely aligned to currency movements than anything else since the Brexit vote.

Talk that India could be about to abolish the current hefty import tax on wheat to ease tightening supplies in the world's second largest consumer of the grain warrants watching.

They've already imported more wheat this year than at any time in the last 9 years and are reported to have picked up 52,000 MT of Ukraine wheat today.

"There is hardly any wheat available on the open market, production is much lower than the government is citing," the President of the Indian Roller Flour Millers Federation told Reuters.

The last time they were in the market  in a big way was 2006 when their unusual presence in the international market helped spark a huge price rally.

Australia would traditionally be India's largest supplier of wheat, and it looks like they will be well placed to service an increase in demand this season,  there's some talk that wheat production there might even break the 2011/12 record 29.6 MMT due to favourable weather.

Russia also looks on the cards to bring in a record breaking crop, with 92.2 MMT of grains already harvested off only 69% of the planned area (wheat 61.8 MMT off 72.6%). Planting for the 2017 harvest is already 16.7% complete on 2.9 million ha.

The Russian Ag Minister said that the impending abolition of the export tax on wheat could see foreign sales rise by 5 MMT to 30 MMT this season.