EU Grains Close

07/07/11 -- July London wheat expired a thrilling unchanged at GBP173.00/tonne, Nov11 fell GBP1.85/tonne to GBP161.65/tonne and Mar12 declined GBP3.60/tonne to GBP165.15/tonne. Nov Paris wheat was down EUR4.00/tonne to EUR191.00/tonne whilst Mar12 fell EUR4.75/tonne to EUR195.00/tonne.

In Egypt's unspecified tonnage tender, the first to permit Russian wheat for almost a year, they bought three cargoes (180,000 MT) of Russian wheat and passed on all other origins.

French wheat was USD30-40/tonne more expensive than the winning Russian bids, with US wheat priced USD10-20/tonne over, plus the corresponding freight premium. Egypt may still be smarting over being let down by last summer's Russian defaults, but money talks at the end of the day.

Each cargo of French wheat would be around USD2 million more expensive than it's Russian counterpart based on these prices.

The French soft wheat crop looks like coming in around 32 MMT this year based on today's estimates from the Ministry there and recent other forecasts over the last few days. That's around 10% down on last year, disappointing but not as bad as was feared a few months ago.

OSR production also seems to have fared better than was expected, down 6% on year ago levels to 4.53 MMT.

Brussels issued soft wheat export licences for 110,000 MT for the first week of the marketing year to July 5th. That's a sharp reduction on the 245,000 MT approved for export in the corresponding period last season.

EU-27 wheat imports meanwhile were up a stunning thirty fold on those of the opening week of the 2010/11 season at 521,000 MT.

The ECB increased interest rates in the eurozone by a quarter to 1.5% today, whilst the BoE left rates in the UK unchanged at 0.5% for the 28th month in a row. Both decisions were widely expected and consequently moved the currency markets little.