EU Grains Close

07/06/11 -- EU wheat futures closed lower with Jul London wheat down GBP2.50/tonne to GBP190.00/tonne and with new crop Nov falling GBP5.00/tonne to GBP184.50/tonne. Nov Paris wheat was down EUR4.00/tonne to EUR225.50/tonne whilst May12 declined EUR3.25/tonne to EUR229.25/tonne.

This was the lowest close for a front month on London wheat since Mar 17, when the market was rebounding from the aftermath of the Japanese earthquake and subsequent tsunami.

Recent significant rains across northern France and central/western Germany are seen benefiting crops there. Southern areas of the UK have at least received something, although coverage here has been more localised.

Despite weather problems in Europe and America the trade seems to be coming to terms with the notion that the crops in eastern Europe and the FSU are looking if not bumper at least ample.

The three lions of the Black Sea - Russia, Ukraine and Kazakhstan - are back on the prowl eager to gobble up any export order going.

Ukraine's Deputy Farm Minister pegs the wheat crop there at no less than 20 MMT, an increase of a minimum 19% on last year. Exports are estimated to be anywhere from 8.5-10.0 MMT, a rise of 140-185% on 2010/11.

The Russian Deputy Agriculture Minister says that their wheat exports may reach 13 MMT in 2011/12, 3 MMT more than the USDA estimate and a 225% increase on the current marketing year.

Wheat production and exports in Kazakhstan meanwhile are seen rising by at least 50% in the season ahead.