Russia 'Actively Discussing' Grain Export Duty

January 31, 2012 02:26 AM
 

What Traders are Talking About:

* Russia considering grain export duty. Russia is "actively discussing" an export duty to slow grain exports, according to the country's ag minister. He says a decision should come within two weeks, without giving an expected level or timeframe. Meanwhile, the head of the Russian Grain Union says if an export duty is enacted, it would be from April forward, which is in line with recent market speculation.

 

The long and short of it: Russia has dominated global trade, especially for wheat, since re-entering the export business last August. An export duty could have a significant fundamental impact.

* Rains continue in Argentina. Rains of 0.3 inch to 1.5 inches were seen across much of Argentina's production area Monday, although it appears eastern Cordoba and Santa Fe missed out on this round of rains. More rains are in the forecast for the next several days and another wave of showers is expected to move across the country this weekend. Areas that received rains are getting a little relief from the extreme heat. Meanwhile, southern Brazil is expected to remain dry the next five to seven days -- and possibly longer. Pro Farmer South American consultant Dr. Michael Cordonnier feels some of the lowest crop estimates will start to inch up as they went too low. He also says harvest progress in Mato Grosso, Brazil, which has been slowed by rains will rapidly pick up this week.

The long and short of it: The recent improvement in Argentine weather hints that a change in pattern may be underway. That would be beneficial for soybeans and late-planted corn, but too late for early planted corn.

* Greek hope improves. Greek Prime Minister Lucas Papademos says negotiators have made "significant progress" on talks with private bond holders. A deal is needed before Greece is can get the next batch of emergency funding needed to keep the country from defaulting on debt obligations.

The long and short of it: Improved hopes of Greece deal are supporting the euro and pressuring the U.S. dollar index. That's supportive for commodities today.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

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