Nogger's Blog

18/03/15 -- EU grains closed mixed, although generally there was little change either way from yesterday.

The day ended with Mar 15 London wheat down GBP0.10/tonne at GBP119.75/tonne, May 15 Paris wheat fell EUR0.75/tonne to EUR192.25/tonne, Jun 15 Paris corn dipped EUR1.00/tonne to EUR163.75/tonne and May 15 Paris rapeseed was up EUR1.00/tonne at EUR370.25/tonne.

Yet again fresh news of any great note was scarce.

Although soon to expire and tradeless Mar 15 London wheat officially closed slightly lower, the more active May 15 finished up GBP0.50/tonne at GBP121.75/tonne, and new crop Nov 15 was GBP0.80/tonne higher at GBP130.45/tonne.

A near GBP9.00/tonne premium to carry old crop six months into new crop explains why many UK farmers remain relatively relaxed about the substantial volume of last year's harvest that they are still sitting on.

The HGCA said that nearby UK wheat prices were following the French corn market much more closely at the moment than they are mimicking French wheat.

"For new crop, on the other hand, movements have been much more in line with other wheat markets," they noted.

There was some support for London wheat today from a weaker sterling/euro, following the release of the Bank of England's MPC minutes of their March meeting showing a unanimous vote to keep interest rates on hold at 0.5%.

The Committee said that whilst they do expect interest rates to rise, the time scale mentioned was only "over the next three years" - which hardly sounds like an increase is just around the corner.

So the pound traded a bit lower versus the euro, which in theory will help UK wheat become a bit more competitive on the export front. That's something that it certainly needs to be.

Reuters reported that German wheat exports could hit as much as 1.0 MMT in March. To put that into perspective Germany only exported 3.9 MMT of wheat in the whole of last season, including just 360,000 MT in March 2014.

The Ukraine Ag Ministry said that growers there have 100% of their seed requirements for the spring sowing campaign already bought. They've also got 88% of their fertiliser needs contracted along with 73% of their fuel.

The first thing that strikes me about that is "how do you know that?" The second thing being "you're making this up aren't you?" Followed by the fact that they need 100% of their fuel, not 73% of it, to carryout the required fieldwork.

The Ministry said that they expect to formulate (make up) some early crop production forecasts by the end of the month.

The Russian's are predictably not so shy. Their Ag Minister has already estimated this year's grain crop at 100 MMT (versus 105.3 MMT last year), but today said that because of the early start to the spring sowing campaign that this would probably be increased higher.

Crops emerging from winter dormancy in the south of the country are looking in better shape than expected, with winter losses therefore likely to be less than feared, he said.

All this of course is exactly why we need to input of independent agronomist Mike Lee and his team, who will begin a 4,000 km 10-day crop tour of southern Russia and Ukraine starting in Kursk next week. To find out more and be one of the first to get the news click here