GRAIN MARKETS rallied briefly last week before falling back, despite Brussels’ most generous export refunds adjudication to date.

On Mar 3, the EU commission offered export licences with a subsidy of €10/t (£6.90) in respect of 451,750t, but traders claimed it was “too little, too late”.

Subsidised wheat exports now exceed 1.2m tonnes, leaving about 0.8m tonnes of the 2m tonne tender still to be awarded.

But by Mar 7, prices were back about £2/t on the previous week’s levels, with May futures quoted at £70.20/t.

Ex-farm wheat was valued at £65-67/t for the same month, depending on location.

Lack of fresh export demand for EU wheat is a big part of the problem, says James Marshall of Centaur Grain.

The larger refund did help close the sale of 60,000t of French wheat to Egypt last weekend, but this was already factored into the market, he said.

“What we really need is some surprise new buyers.”

Also overshadowing the market is talk of a special export tender for intervention grain from member states in central and eastern Europe, promised by EU agriculture commissioner Mariann Fischer Boel.

Hungary, in particular, has had massive problems this season with just 720,000t actually stored of the 4.1m tonnes offered for intervention.

Details of the tender are unknown, but merchants say it is already putting the trade “on the back foot”, with overseas buyers holding off in the expectation that cheaper supplies will soon be available.

The UK is currently a spectator in the European market, with exports uncompetitive. The greater driver here is the internal market balance.

“There is a good deal of chat among farmers that there is not much grain left on farms,” said Banks Cargill grains director Richard Whitlock, “but I’m not so sure.”

With February exports slower than in previous months, he believes there is 15%-20% of the crop remaining unsold on farms.