EU Grains Close

13/05/11 -- May London wheat closed GBP2.00/tonne lower at GBP197.00/tonne with new crop Nov up GBP2.75 to GBP175.25/tonne. Nov Paris wheat rose EUR2.50/tonne to EUR225.75/tonne whilst May was up EUR3.00/tonne to EUR229.25/tonne.

On the week as a whole May London wheat GBP1.00/tonne lower, with Nov up GBP6.50/tonne. Nov Paris wheat was EUR13.00/tonne higher.

Old crop London wheat fell on the surprise news that the Ensus wheat to bioethanol plant on Teesside was to close temporarily. The company blame cheap biofuel imports, particularly from the US, for taking advantage of "loopholes in EU import legislation to avoid established tariffs, bringing bioethanol of uncertain origin and sustainability into the European market."

The plant is expected to be closed for around 2-4 months. With a potential monthly wheat requirement of around 100,000 MT that, in theory, brings a significant volume of old crop wheat back onto the market.

That said, Defra reported yesterday that old crop wheat stocks held on farm in England and Wales at the end of February amounted to only 3.5 MMT, down by more than a quarter on a year previously. On farm barley stocks were down by more than half to 491,000 MT.

Brussels reported yesterday that they'd issued soft wheat export licences for 264,000 MT this past week, bringing the cumulative total for the 2010/11 marketing year to more than 17 MMT.