EU Wheat Mostly Lower Ahead Of Big Day Tomorrow

Posted by Nogger - a legend in his own mind at 17:16 | Categorized as

08/12/11 -- EU grains finished mostly lower with Jan 12 London wheat down GBP1.40/tonne to GBP143.50/tonne and Jan 12 Paris wheat falling EUR0.25/tonne to EUR179.75/tonne.

The market didn't know what to do for the best ahead of a potentially very big day tomorrow. The BoE left interest rates and QE here on hold as anticipated.

The ECB lowered interest rates in the eurozone by a quarter to 1% in a move that was also widely expected. New chief "super" Mario Draghi said that the chance of a eurozone break-up was "quite far-fetched at this stage" - does that suggest that there may be a stage at which it won't be?

He also played down suggestions that the ECB was about to expand its bond purchasing programme, which kept the markets on edge ahead of tomorrow's conclusion to the two day summit in Brussels of EU leaders.

Also tomorrow we have the December WASDE report from the USDA. As a taster for what might come the FAO today pegged the world wheat crop this year at a record 694.8 MMT, 6.5% up on 2010, 10 MMT above the previous record set in 2009 and 11.5 MMT more than the USDA said in November.

In amongst that was an EU-27 wheat crop estimate of 139.2 MMT, up 2.4 MMT on last year and 1.7 MMT higher than the USDA currently estimate. There were also bigger numbers for both Russian and Kazakh wheat production than the USDA currently has factored in, by 2 MMT and 3 MMT respectively.

In other news the French Ministry pegged the soft wheat planted area there up 1% to 5.06 million hectares, the highest since 2008. The total winter grain area is forecast up 1.3% to 7.036 million hectares.

Iraq announced that US and EU origins had missed out after it bought 400,000 MT of Russian, Australian and Canadian wheat in a tender.