EU Wheat Down Again

11/03/11 -- EU wheat took another battering to end the week with Mar London wheat ending down GBP3.00 to GBP181.85/tonne and new crop Nov down GBP1.00 at GBP153.50/tonne. New front month May Paris wheat fell EUR3.25 to EUR223.00/tonne, with Nov down EUR2.25 to EUR203.75/tonne.

Mar London wheat finished the week a hefty GBP14.70/tonne lower than it began it, whilst May Paris wheat has how fallen EUR21/tonne since last Friday.

London, Paris and Chicago wheat fell every day this week as spec money poured out of grains leaving longholders bewildered and with their confidence in tatters.

This week we've had an escalation of turmoil in the Middle East, downgrades to Spain and Greece's credit ratings, increases in world and US wheat ending stocks from the USDA and now an earthquake and tsunami in Japan.

We've been on major bull run since the end of June 2010 and the market was overdue a correction and all of those factors have helped to spark one.

In the case of world wheat stocks yesterday's USDA revisions now peg stocks to usage at 27.4% - we've only been higher than that twice in the last ten years - so where's the crisis?

The real crisis may still be six months away when pork chops and fillet steaks are being sold on eBay along with Take That tickets.