EU Grains Close

17/05/11 -- EU grains closed with May London wheat GBP4.00/tonne lower at GBP193.00/tonne and with new crop Nov up GBP2.75/tonne to GBP180.50/tonne. Nov Paris wheat closed EUR2.75/tonne higher at EUR231.50/tonne whilst May12 was up EUR2.75/tonne to EUR234.00/tonne.

In London the old crop/new crop spreads continued to narrow on the back of news of the Ensus shutdown as old crop longs feel less comfortable hanging onto their positions.

The May/Nov London spread has narrowed from being GBP43.75/tonne to GBP12.50/tonne in the past four weeks, whilst the Jul/Nov differential has gone from being GBP37.00/tonne to just GBP5.75/tonne in the same period.

Paris malting barley was sharply higher again on the back of ideas that this season's production is going to be very poor. Nov closed EUR12.00/tonne higher for a EUR45.00/tonne or 17% gain in a fortnight.

Customs data reveals that UK wheat exports are finally slowing down as stocks dwindle. March exports were just 100,673 MT, the lowest monthly total of the season so far. Marketing year to date exports (Jul/Mar) still come in at 2.34 MMT, up 35% on a year ago though.

Barley exports for the YTD are down from 818 TMT to 664 TMT, a decrease of 19%. The real surprise package is UK rapeseed exports up more than threefold to 326 TMT, with March exports close to a marketing year high of 71.6 TMT.

In March the Netherlands was the top UK wheat home at 27.4 TMT, with France in second at 20.9 TMT and Spain/Portugal equal third on 9.2 TMT.

A report on Bloomberg quotes Oil World as saying that "the deterioration of rapeseed production prospects (in the EU-27) is about to reach alarming proportions."

How "alarming" is alarming? They say that production here could fall to 19.5 MMT, that's "only" down 5.5%, and would actually be the third highest output on record, but it makes for a nice headline.