EU Grains Close

Posted by Nogger - a legend in his own mind at 19:11 | Categorized as

28/04/11 -- May London wheat closed GBP2.10/tonne lower at GBP205.00/tonne with new crop Nov down GBP4.95 to GBP169.65/tonne. May Paris wheat fell EUR5.25/tonne to EUR240.50/tonne whilst Nov was EUR9.25/tonne lower to EUR210.75/tonne.

Grains tumbled sharply on a combination of factors including both the pound and euro hitting or threatening to break through 17-month highs against the dollar after the US Fed chairman last night said that US interest rates are set to remain low "for an extended period."

Some rain relief for France and Germany also helped, as did forecasts for some of that precipitation to reach the SE of England tomorrow.

The weather outlook is also improving in the US, with forecasts for rain and cooler temperatures in Kansas, and a drier fortnight ahead for the wet corn belt further north.

CBOT corn hit limit down at one point late in the day on the back of these revised forecasts.

The US agricultural attaché projects all wheat production in the EU-27 at 141.3 MMT this year, which is up 4% from the 135.8 MMT harvested last year. Barley production is seen at 54.5 MMT, compared with 53.0 MMT in the previous year, and corn output at 59.3 MMT versus 55.5 MMT in 2010.

Confidence seems to be growing of a decent crop in Ukraine this year, with the Ministry there raising their 2011 grain crop estimate to "up to 45 MMT" from 42-43 MMT previously.

Total grain exports are seen rising from 13.5 MMT in 2010/11 to 19-20 MMT in 2011/12, which would be second only to the bumper record season of 2008/09.