EU Wheat Closing Comments

Posted by Nogger - a legend in his own mind at 18:47 | Categorized as

16/12/10 -- London wheat closed mixed with Jan unchanged at GBP190.00/tonne and new crop Nov down GBP0.45 at GBP158.75/tonne. Paris wheat closed lower with Jan down EUR2.00 at EUR236.00/tonne and Nov down EUR0.25 at EUR213.25/tonne.

Once again the market is struggling to balance very tight old crop stocks against slack demand from the feed sector. Interest in high protein wheat is still robust, with Egypt, Algeria and Jordan all in the market this week, although the US picked up a significant portion of that business.

China say that their corn crop will amount to a record 172.5 MMT this year, which may curtail ideas of large scale imports in 2011.

Strategie Grains released their first impressions on EU grain output for next season today. They peg the wheat crop at 144.8 MMT, which would be an increase of around 8 MMT, or 6% on this season.

German output is seen climbing by around 2 MMT as yields return to normal, with the French also seeing production increase by a similar amount and UK output up by around 1 MMT on increased plantings.

EU-27 barley production is forecast up at 55.5 MMT, from 52.8 MMT this year, whilst corn output is seen at 58 MMT, from 54.7 MMT in 2010/11.

Ukraine says that winter wheat plantings there are only down marginally, but winter rapeseed sowings have declined by almost a quarter.

The US took a step closer to renewing the ethanol blenders tax credit (due to expire on Dec 31st) by getting the vote past the Senate, the House of Representatives is next. That might be tougher to push through but victory is expected nonetheless. That should keep US corn pouring into the ethanol sector in 2011.