EU Wheat Close

Posted by Nogger - a legend in his own mind at 18:42 | Categorized as

11/11/10 -- Nov10 London wheat closed with losses of GBP1.50 at GBP167.00/tonne, whilst Nov11 was GBP0.65 higher at GBP147.65/tonne. Paris wheat finished with Jan11 down EUR1.00 to EUR221.25/tonne, whilst Nov11 rose EUR1.00 to EUR201.75/tonne.

The euro was sharply lower on concerns over Irish and Portuguese debt problems. The spread between 10-year Irish and German government bonds is now at its widest ever. The pound rose to over 1.18 against the euro for the first time since late September.

That ultimately dragged old crop London wheat lower. New crop was higher on ideas that the differential between old and new crop is too large at around GBP20/tonne.

French analysts Strategie Grains said today that EU-27 wheat, corn and barley plantings will rise for the 2011 harvest. Wheat area will increase by 2.2% to 23.4 million hectares, whilst barley plantings will grow by 2.9% and corn sowings by 6.2%.

They cut their 2010 EU-27 corn production estimate for the sixth month in a row to 55.1 MMT. The firm also warned on dwindling French and EU stocks as exports continue at a rapid pace.

French wheat ending stocks are projected at just over 2 MMT by FranceAgrimer.

Despite all the bullish rhetoric, it is worth remembering that the livestock sector is hurting badly. Demand for this sector is sluggish at best with prices at these levels, and nobody in the compound feed industry is reporting being overly busy.

They had a very decent summer period, but now that the price rises of the past four months or so have been fully factored into finished feed levels offtake has fallen away markedly.