EU Wheat Latest

13/10/11 -- EU grains are mostly a tad lower after yesterday's sharp slump, with Nov London wheat GBP0.45/tonne easier and Jan Paris wheat down EUR0.50/tonne.

As we currently stand, approaching midday, both are however still showing small gains on the week as a whole.

The global wheat picture is changing with production and stocks estimates climbing, and it's the major exporting nations that are seeing most of those gains, not traditional non-exporters like China and India. Non-exporter or not, the latter is currently loading 100,000 MT of it's record 2011 wheat crop for shipment to neighbouring Bangladesh before another anticipated record crop comes in in early 2012.

Kazakhstan's grain harvest now stands at 26.2 MMT in bunker weight with a little over 5% of the crop left to be harvested. Allowing for cleaning and screening, and working on the basis that wheat normally accounts for around 80% of grain production there, we are probably looking at s final wheat number of around 20 MMT - 1 MMT more than the USDA assessment.

"Kazakhstan production is raised 3.0 MMT based on harvest results that confirm the impact of abundant moisture and near-perfect summer weather on this year's crop," the USDA said yesterday.

In Russia, domestic wheat prices have fallen for the third week in a row, say SovEcon. Their wheat export potential was increased 2 MMT to 18 MMT by the USDA yesterday.

Based on yesterday's USDA data, Goldman Sachs now says that it expects wheat to "under perform" for the remainder of 2011/12 and that it sees "downside risks" to it's existing three month and six month price targets for the grain.