EU Grains Close

20/07/11 -- EU grains finished modestly lower with Nov London wheat down GBP0.25 at GBP165.65/tonne and with May also falling GBP0.25/tonne to GBP172.60/tonne. Nov Paris wheat was down EUR2.25/tonne to EUR199.25/tonne whilst May12 declined EUR1.75/tonne to EUR203.50/tonne.

Chicago grains were higher, but Europe now seems to be attempting to divorce itself from events the other side of the pond.

Closer to home we have a major resurgence in grains availability from the Black Sea with prices around USD40-50/tonne cheaper than they are in Europe.

Ukraine's Ag Ministry increased their forecast for the 2011/12 grain crop today by 2 MMT to 47 MMT, up 20% on last season. Exports are seen almost doubling to 23 MMT.

Rains across the UK and northern/western Europe are slowing harvest activity for the time being, although drier weather is in the forecast next week.

Early UK barley and OSR yields are reported to be much better than anticipated, and although the wheat harvest is still a couple of weeks away optimism is high that output here will also prove to exceed expectations.

Consumer interest remains subdued at best, the feeling is that once producers have the harvest wrapped up then they will finally turn their attention to making some new crop sales.

Intriguingly, open interest in both London and French wheat is heavily stacked towards front end Nov11. In the case of thinly traded London it's over 1 MMT and in the case of Paris nearly 7.5 MMT.