Nogger's Blog

06/07/11 -- EU grains closed mixed with wheat and corn lower and rapeseed and malting barley higher. July London wheat fell GBP2.00 to GBP173.00/tonne and new crop Nov also declined GBP2.00/tonne to GBP163.50/tonne. Nov Paris wheat closed EUR3.00/tonne lower at EUR194.50/tonne whilst May12 fell EUR2.25/tonne to EUR201.00/tonne.

Market volatility continues. Today we had the bearish influence of the credit rating agency Moody's cutting Portugal's rating to "junk" which unsettled the markets in general, and the euro in particular.

We also had China upping interest rates for the third time this year in another attempt to rein in inflation.

The UK barley harvest is limping along slowly, with initial results generally proving to be better than expected.

Harvesting in France so far has proven to be more variable although quality is good.

Offre et Demande Agricole increased their French wheat crop estimate by 1 MMT to 32 MMT as the harvest there progresses. "The further north the harvest goes, the better the crop is," they told Agrimoney.com.

Heavy recent rains in Ukraine may mean more feed wheat and less milling wheat for them. They've harvested 1.8 MMT of grains so far, with yields up 14% on last year.

In Russia around 1 MMT mostly winter barley has been cut so far with yields up 31% on 2010.

Across the pond, spec money continues to desert the corn market despite the widespread dismissal of last week's USDA numbers as rubbish. If ever there was a case to clearly illustrate that spec money really does have an influence on prices then this is surely it.

The bottom line appears to be that if European debt, or Chinese demand or whatever comes along next to spook them makes them continue to take their money off the table then the market goes lower regardless of what the fundamentals say.