EU Wheat Ends Week Barely Changed

Posted by Nogger - a legend in his own mind at 12:56 | Categorized as

02/12/11 -- EU grains ended mostly higher walthough Jan 12 London wheat was down GBP0.90/tonne to GBP143.15/tonne, Jan 12 Paris wheat was EUR2.00/tonne higher to EUR181.25/tonne.

There wasn't much change on the week as a whole with Jan 12 London wheat up GBP0.90/tonne and Jan 12 Paris wheat up a marginal EUR0.25/tonne.

The market seems to be treading water looking for direction, the week ahead may provide some with EU leaders supposedly set to put some flesh on the bones of their promised plan to save the world by December 9th. Ahead of that Merkel and Sarkozy meet on Monday.

Whilst this week's coordinated central bank action may improve liquidity it won't do anything to help solvency, and that is what this crisis is really all about.

There are some concerns starting to form over crop prospects in Ukraine, where dryness means that almost a quarter of autumn-planted grains still haven't emerged. "Ukraine rainfall has been less than 40% of normal in the 90 days ending mid November," according to Martell Crop Projections.

In contrast, analysts in Russia are indicating the potential for a bumper 100 MMT grain crop in 2012, which would be the second highest harvest in the post-Soviet era.

China's National Bureau of Statistics says that this season's corn harvest there is a huge 191.75 MMT, far higher than other estimates in the market (the USDA say 185.4 MMT). Their activity, or otherwise, on imports over the coming months will perhaps offer a few clues as to how accurate that number is likely to be.