Nogger's Blog

12/09/11 -- EU grains finished mixed with Nov London wheat falling GBP1.10/tonne to GBP167.40/tonne and Nov Paris wheat climbing EUR1.25/tonne to EUR208.00/tonne.

The eagerly awaited USDA reports were a mixed bag for corn, but a bit bearish for wheat and quite negative for beans. US corn yields and production were cut a bit more than anticipated, but these reductions were more than made up for by decreases in demand.

Usage was cut by 400 million bushels in total, with the livestock sector taking its smallest volume in 16 years at 4.7 billion bushels and even ethanol demand is seen falling slightly. US exports will also fall to a 9 year low, they added.

For wheat, world production was increased by 5.7 MMT for 2011/12 to 194.6 MMT, an output only beaten once in the last ten years, thanks to increases for Canada (up 2.5 MMT to 24.0 MMT) and the EU-27 n(up 2.3 MMT to 135.8 MMT).

Elsewhere Russia has harvested 71.5 MMT of grain to Sept 1st with a third of the harvest still to go, the agriculture ministry said Monday. Average yields are 2.45 MT/hectare, compared with 1.97 MT/ha in 2010.

That potentially still leaves the country on target to exceed the government's stated target of 90 MMT this year.