EU Grains Close

18/07/11 -- Nov London wheat was lower, down GBP3.00/tonne to GBP162.00/tonne with Nov Paris wheat falling EUR4.50/tonne to EUR195.50/tonne.

The ramifications of the European debt crisis, and those of the potential raising of US debt ceiling have got the market very cautious.

Crude oil was lower on the back of nervousness regarding those two issues.

In addition reports coming out of the Black Sea of reasonably plentiful supplies of cheap grains and decent harvest prospects also weighed on the market.

Latest crop production estimates for the EU are nowhere near as pessimistic as those from a month or two ago, whilst wheat continues to enter the bloc at a faster rate than it is leaving it.

May/June rains appear to have arrived just in time to stave off the kind of losses that were being predicted back then, whilst providing a welcome boost for spring sown grain production.

Meanwhile Russian milling wheat is out-pricing French wheat at around USD40/tonne and Ukraine look like having an abundance of cheap feed wheat to saturate the European/North African market with in 2011/12.

Jordan is tendering for 100,000 MT each of optional origin wheat and barley, and Iraq for 100,000 MT of wheat. There isn't much chance of Europe winning any of those orders.