EU Grains Close

12/07/11 -- Nov London wheat fell GBP1.00/tonne to GBP161.50/tonne and May12 declined GBP0.85/tonne to GBP168.15/tonne. Nov Paris wheat was EUR0.50 higher whilst May12 fell 0.50/tonne to EUR196.00/tonne.

Concerns about European debt were partially offset by a mildly friendly USDA report.

Talk of an imminent Greek debt default and some bigger player such as Spain and Italy getting rapidly sucked into the vortex had the euro on the back foot, and investors giving commodities a wide berth.

The USDA did a little to help, cutting world wheat production, and consequently world ending stocks by around 2 MMT for the season ahead. Even so 2011/12 stocks/usage is still a comfortable 27%.

Canada's crop was reduced from an estimated 25 MMT last month to 21.5 MMT this time round, and her export potential cut from 18.5 MMT to 16 MMT on the back of it.

EU-27 wheat output was raised from 131.5 MMT to 132.12 MMT, with exports left steady at 15 MMT.

As far as the Black Sea is concerned Russian and Kazakh production estimates were left unchanged, but Ukraine's crop was downsized from 19 MMT to 18 MMT and exports there cut by a corresponding 1 MMT to 7.5 MMT. Russia's export potential was however raised by 2 MMT to 12 MMT.

Elsewhere the French farm office, FranceAgriMer, upped their soft wheat production estimate from 31 MMT to 32 MMT reflecting drought losses being not as bad as had been feared.