EU Grains Close

16/06/11 -- EU grains closed mixed with July London wheat down GBP1.35 to GBP176.65/tonne and with new crop Nov falling GBP1.50/tonne to GBP173.50/tonne. Nov Paris wheat closed EUR0.75/tonne higher at EUR213.025/tonne whilst May12 rose EUR1.25/tonne to EUR220.75/tonne.

Paris wheat rose on the back of a weak euro on a continuation of the Greek debt crisis. London wheat fell as it continues to re-align itself with wheat markets elsewhere, having fallen less than either Paris or Chicago since the Russian export ban was agreed to be lifted.

French analysts Strategie Grains cut their EU-27 soft wheat production estimate by 6 MMT from last month to 125.6 MMT, now 1 MMT lower than last year. They've correspondingly cut export projections for 2011/12 by 4 MMT from last month to 12.9 MMT, 6 MMT below what they expect in 210/11.

Barley production is seen down 2 MMT from last month to 52.2 MMT and the corn crop reduced 100,000 MT to 59.0 MMT.

The market hardly reacted to the news, a worrying sign. US corn futures meanwhile continue to decline at an alarming rate given the much publicised tight ending stocks highlighted in last week's USDA report.

Anecdotal reports from many parts of the UK suggest that the wheat crop isn't looking as bad as feared after some decent rains finally arrived a month or so ago.

More rain is forecast to bring further moisture relief to much of the country by the weekend, indeed one market report today has to be credited with being the first to say that there can be too much of a good thing!

Brussels issued export licences for 151,000 MT of soft wheat this past week, bringing the YTD total to 17.95 MMT with two weeks of the campaign left to run. That's only a 3% increase on where we were a year ago, before Christmas we were running at 35% ahead of a year previously.