Grain cup is a quest item in the Blood and Wine expansion, which can only be found and used during the main quest, The Beast of Toussaint.
After arriving with Anna Henrietta at the Palace Gardens, north of and close to the spot where she takes the phoenix egg, there will be a few people talking about auguring from the way peacocks feed. The cup can be picked up from the cart, equipped in the pockets slot, and used to feed the peacocks there to trigger extra dialogue from the people.
Bugs
- Prior to Patch 4.0 the loot object was bugged and the item couldn't be picked up.