Nogger's Blog

19/09/11 -- EU grains finished lower with Nov London wheat down GBP2.75/tonne to GBP159.00/tonne and Nov Paris wheat ending EUR1.50/tonne lower at EUR195.50/tonne.

London wheat slumped below GBP160.00/tonne - a front month has only closed lower than this on two occasions since early October 2010.

Paris wheat fared a little better due to the weak euro declining on heightened Greek debt concerns.

Despite a lot of huffing and puffing over the weekend we don't seem any closer to resolving the Greek issue now than we've ever been.

Paris corn, rapeseed and malting barley also fell in line with broad-based declines in US grains too.

Heavy selling, particularly in US corn which was massively overbought, has seen funds dump an estimated 35,000 Chicago contracts (almost 4.5 MMT) on Thursday/Friday alone last week.

Consumer demand will struggle to cope when liquidation on that scale is going on.

Chicago corn futures prices fell to six week lows, with wheat declining to levels not seen in ten weeks in afternoon trade.

Some demand is filtering through at these levels. Algeria announced that it had bought 450,000 MT of optional origin wheat, probably French, earlier today. Tunisia has also been in the market booking 92,000 MT of soft wheat and 25,000 MT or durum.

It's likely that Egypt will issue another tender later this week too as prices continue to drift, although Russia will almost certainly undercut European wheat once again.