OVERSEAS INTEREST in European grain has eased again, after the announcement that Brussels is about to open an export tender for 794,000t of intervention wheat and 500,000t of intervention barley.

The EU commission says public stocks now exceed 10m tonnes, compared with just 3.5m tonnes at the start of the season. “Of the total offers to intervention, about 60% concern the new member states,” said a statement.

landlocked

 These countries have not benefited from the recent export refunds for open market wheat, because many are landlocked and cannot ship to Third countries competitively. As such, the latest tender for intervention wheat is targeted at stocks in Hungary, the Czech Republic, Poland and Austria.

 Shippers are being invited to bid for this grain on Mar 31, with further tenders held until the end of June to help shift the growing surplus ahead of this summer”s harvest.

But how far this will go to help the market is in some doubt. Third country buyers are already holding back in the expectation that prices will fall, while the strengthening euro continues to put pressure on EU prices.

“I expect that shippers will bid quite cautiously,” said James Maw of UK merchant Glencore Grain. “It”s not the easiest grain to access location-wise, and there are questions as to its quality and who will want to buy it.” There is not much Third country demand anyway, with many importers now covered to harvest.

 futures down

 French futures fell 3.5/t (2.45) to about 106/t (74) for May after the announcement of the intervention tender, though this probably had more to do with the low award of just 2000t of open market refunds at 10/t (7) out of a total of 821,500t submitted by traders.

 Julian Bell of the Home-Grown Cereals Authority says the commission is now effectively competing with itself, offering subsidies on open market grain and taking a hit on intervention stocks. But the volumes on offer are still small compared with the total amount that has already gone into intervention. “It is more of a gesture than anything else.”

To some extent, the UK is isolated from these developments, with attention now focused on supply/demand as the season enters its last few months. Mr Maw does not believe ex-farm prices will slip any further. “If we”ve over-cooked it and there is still export demand in June and July, we could see prices firm quite sharply,” he said. It may, therefore, be worth farmers” while holding on to a bit, just in case.