27 April 2015 | Online since 2003



4 March 2014|Arable,Cereal,Crops,Finance,News

Threat of halt to Ukraine corn exports gets market nervous


EU grains closed sharply higher as tensions between Ukraine (and the West) and Russia scaled up a level or two over the weekend. This is the biggest crisis of the 21st Century for Europe, according to British Foreign Secretary William Hague. Russia's military has given Ukrainian forces in Crimea until dawn on Tuesday to surrender or face an assault.

Mar 14 London wheat closed GBP5.25/tonne firmer at GBP161.00/tonne, whilst new crop Nov 14 was GBP4.55/tonne higher at GBP152.05/tonne. Mar 14 Paris wheat closed EUR7.25/tonne higher at EUR208.50/tonne, Mar 14 Paris corn was up EUR3.50/tonne at EUR172.75/tonne, whilst May 14 Paris rapeseed was EUR5.25/tonne higher at EUR400.00/tonne.

Crude oil jumped to it's highest since September, and short-covering/spec buying meant that wheat followed suit, despite reports that grain exports out of Ukraine had so far largely continued relatively unhindered by recent developments.

Agritel said that Ukraine exported over 500 TMT of corn last week, along with 57 TMT of wheat, and that Russian ports on the Black Sea had loaded more than 200 TMT of wheat in the final week of February.

Nevertheless, the threat of a sudden halt to Ukraine's exports (of corn in particular) has got the market very nervous. They are scheduled to be the world's 3rd largest exporter of corn in 2013/14, along with being the 6th largest exporter of wheat. Agritel suggest that Ukraine still has around 5 MMT of corn and 3 MMT of wheat left to export this season.

The Ukraine hryvnia and Russian rouble fell to new lows against the US dollar and euro, which in theory makes exports out of the region even cheaper. It also makes imports very expensive though, and raises the question of whether growers in the region will be able to afford to pay for these products later in the year.

What will Europe and the West do, if anything, in retaliation to the Russian invasion of Ukraine? This isn't sending a few thousand troops into Afghanistan to fight the Taliban, after all. Will (most of) the world announce sanctions against the import of Russian grains? If they do, will China follow suit?

As ever, the market doesn't like uncertainty, and so up it goes. As stock markets around the world fall, it now seems like agri-commodities are suddenly back in vogue. That's changed in the blinking of an eye, and could just as easily switch back again of course. Is this a selling opportunity, or the start of a move back to old ground, many are asking?

In other news, the HGCA reported that England and Wales had planted more than 3.8 million hectares of winter wheat, barley, oats and OSR by Dec 1, a 14% increase on last year.

They said that 1.815 million ha of that was wheat, 19% more than the entire harvested area in 2013, before including ant late winter wheat and/pr spring planted crops.

The winter barley area was almost 370k ha, the highest since 2003, and the winter OSR area was just over 700k ha, up 3% from a total (winter and spring) area last year, they added.

“The higher wheat area increases the likelihood of the UK being able to return to being a net exporter of wheat in 2014/15. However, weather conditions during the rest of the growing season will be important in determining the quality and yields, and thus the UK’s export potential next marketing season,” they concluded.

Download




Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


15 April 2015
Account Manager (Field Sales) - Automotive Aftermarket Manufacturer
Engineering, Installation, Service, Technician, Mechanic, Caravan, LCV, Leisure, Motorhome, Automotive, Car, Truck, Light Com...

13 April 2015
Feeder Person/Stockperson/Herdsperson
This is a great opportunity for those wishing to have a balance between machinery, stock work and milking duties on a large, ...

17 April 2015
Assistant Manager (maternity cover)
Location - Street Outlet - The Works Outlet, Unit 75 Clark's Village, Farm Road, Street, Somerset, BA16 0BB....

16 April 2015
Legal Secretary
Day to day duties will include fast and accurate audio and copy typing, drafting basic correspondence, dairy and email manage...

6 April 2015
Account Manager - Client Manager Marketing Solutions Company
We are looking for someone to come help develop and farm accounts so must have great relationship skills - business developme...



Top stories you may have missed
10 April 2015 | Agri Safety

The permanent eradication of Bovine Viral Diarrhoea [BVD] in Scottish cattl...


10 April 2015 | Dairy

The abolition of milk quotas in Europe on 1st April has resulted in a numbe...


10 April 2015 | Cattle

The top 14 milk producing countries in Europe will increase their productio...


10 April 2015 | News

Matt Ware is the NFU's head of government and parliamentary affairs, based ...


10 April 2015 | Arable

There is a 'desperate need' to improve farmgate returns given low incomes a...


9 April 2015 | Arable

Rapid stem extension, after a slow start to spring, is likely to create spl...


9 April 2015 | Finance

The time has come for landlords to expect to see reductions in farm rents, ...


8 April 2015 | Cattle

Cogent’s reputation as a source of the highest calibre sires has been enhan...


8 April 2015 | Arable

The spread of exotic and aggressive strains of a plant fungus is presenting...


7 April 2015 | Animal Health

The FSA’s new Food Crime Unit wants the industry to share information, some...