EU Grains Rise, MARS Sees Some Weather Damage, Russia's Next Move Mulled

26/01/16 -- EU grains finished mixed, but mostly a touch lower. It was the turn of Paris grains to get a little currency boost from a weaker euro today, with the pound popping back up above the 1.30 level versus the single currency.

At the close of trading, Mar 16 London wheat was up GBP0.15/tonne at GBP110.45/tonne. In Paris, Mar 16 wheat rose EUR1.50/tonne at EUR168.50/tonne, Mar 16 corn was up EUR0.50/tonne at EUR156.75/tonne and Feb 16 rapeseed was up EUR2.75/tonne to EUR362.75/tonne.

In its first report of 2016, the EU Commission's MARS Unit said that a lack of hardiness caused by the "extremely mild weather of last December" and "an intense cold air intrusion started on 29 December 2015 in the eastern half of Europe" may have caused some crop damage.

"The sharp temperature drop combined with shallow (1-5 cm) snow cover, primarily in Poland and western Ukraine, caused some frost injuries as simulated by the model. This cold spell lasted until 6 January, and the most severe frosts reached -15 and -18°C in this region. Slight or moderate frost-kill damages are predicted in eastern Poland, the Baltic States, western and southern Ukraine, Moldavia, south-western Belarus, north-eastern Romania and some regions of southern Russia.

"The possibility of minor frost-kill damages also exists in some spots of Sweden, Finland, Bulgaria and Turkey. As far as the weather forecast is concerned, no additional frost-kill damages are indicated by our model until the end of January," they added.

Their next report is due on Feb 22.

The Ukraine Ag Ministry said that the country had finished 2015 with a total grain harvest of just under 60 MMT, some 6% down on a year previously. That includes 26.5 MMT of wheat (-10%), 8.3 MMT of barley (-8.5%) and 23.2 MMT of corn (-18.1%).

Ukraine's 2015 OSR crop ended up at 1.7 MMT for a year-on-year decline of 20.8%.

Ukraine said that it had exported almost 24 MMT of grains this month, including 10.9 MMT of wheat, 8.95 MMT of corn and 3.93 MMT of barley.

The market is still trying to weigh up Russia, and what it may, or may not, do next as far as it's current export duties are concerned on wheat.

The notion that they might restrict exports further, at a time when fund money already has a sizable short position in Chicago wheat, could stimulate some supportive buying - even if US wheat is likely to see little direct export benefit.

Rusagrotrans estimated the country's Feb grain exports at 1.4 MMT, down from 1.5 MMT this month, and far lower than the record 3.85 MMT shipped out in December.

On the international tender front, Algeria are in the market for 50,000 MT of feed barley.