EU Grains Close

Posted by Nogger - a legend in his own mind at 19:18 | Categorized as

19/06/12 -- EU grains finished higher with Jul 12 London wheat ending up GBP2.25/tonne to GBP178.50/tonne, and new crop Nov 12 ending GBP2.65/tonne higher to close at GBP158.50/tonne. Aug 12 Paris wheat was EUR1.25/tonne higher at EUR208.00/tonne, whilst Nov 12 was EUR2.75/tonne firmer at EUR210.25/tonne.

Deteriorating crop conditions in the US and Russia were behind today's move higher.

Last night the USDA cut their US corn crop ratings by 3 percentage points in the good/excellent category to 63% versus 70% a year ago. That makes the current USDA yield estimate of a record 166 bushels/acre look particularly unlikely.

SovEcon cut their estimate on grain production in Russia this year to 85 MMT from 88.5 MMT previously and around 9 MMT below last season's total.

Wheat production will fall to 50 MMT, they said (versus 56 MMT on 2011). That's 3 MMT down on their previous forecast and also that from the USDA last month.

Wheat production in the southern Krasnodar district may fall by 40% this year to just 4 MMT, according to the regional governor.

Rabobank were less bearish on Russia's crop prospects, forecasting a wheat crop of 52 MMT.

In addition they also pegged the EU-27 wheat crop at 132.5 MMT, which is 1.5 MMT more than the USDA said last month.