EU Grains Close - Monday

04/06/12 -- Paris grains finished mostly lower with the London market closed for a two day public holiday. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 was EUR2.25/tonne lower at EUR206.50/tonne. Corn was one wuro firmer to one euro lower, whilst rapeseed ended with losses of EUR5-6.00/tonne.

European markets were playing catch-up with a sharply lower US wheat close on Friday night, although the overnight electronic market did manage to reverse some of those losses today.

European concerns are never far away, with fabled billionaire investor George Soros warning that EU leaders only have a three-month window left to save the euro. The German economy will soon start to weaken under the burden of trying to keep the eurozone intact, he says, making it more difficult for Angela Merkel to sell the idea of increased financial responsibility to the German electorate and tax-payers.

Crude oil was under pressure again for most of the day, extending recent losses on fears over the health of the global economy.

Weekend rains in the US were lighter and less widespread than had been hoped, allowing grains there to rebound somewhat from last week's losses.

The Ukrainian Grain Association say that grain carryover stocks at the end of the 2011/12 marketing year could be as high as 12 MMT after the government there were slow to remove export restrictions earlier in the season. That should compensate for winter wheat losses and allow them to participate in a full export programme in 2012/13, led by corn.

Kazakhstan will have healthy grain carryover stocks of 5 MMT, according to the Minister of Agriculture, and that's only if they can manage to export 4.5 MMT in the last two months of the marketing year, which sounds rather ambitious in the current climate.

Kazakh spring grain plantings are 96% done, he added. Russian spring sowings are at around a similar stage of completion, whist Ukraine's are said to have already exceeded expectations.

Winter crop conditions in the latter are said to be 68% good/satisfactory, with winter wheat rated 71.4% good/satisfactory.

Rusagrotrans say that an optimistic assessment of the 2012 grain harvest potential in Russia places the total crop at around 93.4 MMT - only marginally down on last year. A "moderate" estimate would be 89.6 MMT and a pessimistic one 82 MMT. The middle ground figure would allow them to export 19 MMT of grains in 2012/13, they say.

Ukraine meanwhile says it is hoping to export 3 MMT of corn to China in the coming season, which would be a knock to US export hopes if they can allay the Chinese authorities fears on quality issues.