EU Grains Close - Thursday

11/08/11 -- EU grains finished mostly firmer with Nov London wheat up GBP1.25/tonne to GBP163.25/tonne and Nov Paris wheat ending EUR2.50/tonne higher at EUR197.50/tonne.

The USDA it's raised EU-27 wheat production estimate by less than expected to 133.5 MMT, 2.1 MMT down than last season.

Output in both Russia and Ukraine was raised by 3 MMT each to 56 MMT and 21 MMT respectively as world production ws hiked almost 10 MMT from last month to 672 MMT.

World consumption was raised 4.7 MMT to almost 675 MMT, with 2011/12 ending stocks increasing by 6.7 MMT to nearly 189 MMT. That total is now only 10 MMT shy of the so-called "burdensome" stocks levels of 2009/10 and the third highest in the past ten seasons.

US wheat exports were cut 1.5 MMT to 30 MMT on the back of increased competition from the Black Sea where Russian exports were raised 4 MMT to 16 MMT and those of Ukraine upped 1.5 MMT to 9 MMT. EU-27 export potential was left unchanged at 15 MMT.

Never one to disappoint though, the USDA provided their traditional surprise by cutting their US corn yield estimate by far more than the trade expected, by 5.7 bushels per acre to 153.0 bushels per acre.

That lopped 14 MMT off US production this year causing corn prices in Chicago to jump around 25 cents despite the fact that a plethora of private estimates around the 153bpa mark were already in the market.

Forecast production increases in the EU-27, Brazil and Ukraine combined with a projected fall in consumption actually only resulted in 2011/12 ending stocks falling a smidgen over 1 MMT.