EU Grains Stumble

04/02/15 -- EU grains stumbled mostly lower, failing to add to yesterday's decent gains. Fresh news was generally lacking.

At the close, Mar 15 London wheat was down GBP0.60/tonne at GBP123.45/tonne, Mar 15 Paris wheat was unchanged at EUR186.50/tonne, Mar 15 Paris corn was up EUR0.50/tonne at EUR154.50/tonne and May 15 Paris rapeseed was EUR2.00/tonne lower to EUR352.25/tonne.

The President of the Russian Grain Union forecast the country's Feb wheat exports at 150-200 TMT due to the new export duty, substantially less than the 500-600 TMT predicted by Rusagrotrans yesterday.

The Russian Ag Ministry have said that they are likely to make adjustments to the new export duty in the next week or two, without indicating what that might entail.

The aim would appear to be to encourage more farmer sales to the state intervention fund, which has been woefully under-subscribed to of late. Since purchasing began in September the government have only picked up around 350 TMT of grains at intervention out of a stated target of around 2.5 MMT.

Concerns over the state of Russia's winter wheat remain high, despite official assurances that all is reasonably well with the crop.

SovEcon estimated Russia’s 2015 grain crop at 86.0 MMT, down 17.3% versus 104 MMT last year.

Meanwhile in Ukraine, the Minister of Farm Policy said that the cost of the spring planting campaign is up by 150% versus a year ago. There are "serious issues" facing cash-strapped producers in funding the purchase of seeds and other inputs, he said.

Libya made no purchase in their tender for 50,000 MT of optional origin milling wheat due to payment issues, according to Reuters.

Turning wheat into bioethanol hasn't turned out to be quite such a lucrative idea as some would have hoped. ABF have announced a GBP98 million write-down in value of its Vivergo joint venture with BP and DuPont due to falling crude oil prices and the weak euro. Up the coast from Vivergo, the UK's other major bioethanol plant, Ensus, has now temporarily closed.