EU Grains Close

04/08/11 -- EU grains finished lower with Nov London wheat down GBP2.75/tonne to GBP161.25/tonne and with May falling GBP2.60/tonnne to GBP168.85/tonne. Nov Paris wheat was down EU2.50/tonne to EUR196.75/tonne whist May12 fell EUR2.75/tonne to EUR201.00/tonne.

Economic jitters haven't quite turned to panic yet, but they aren't that far off. As I write NYMEX crude oil is more than USD5.00/barrel lower on the day and now looks like closing well under the USD90/barrel mark for the first time since February.

When European markets closed crude was only around USD2.00/barrel lower, so it is already looking like there could be some follow through to this in the morning. US grains are also sharply lower heading into the close.

EU economic worries saw the pound rise above 1.15 against the euro for the first time since late May. The dollar was also stronger on a flight to safety.

The HGCA have the UK wheat harvest at around 5% done, with winter barley 75% cut and OSR 65% complete. Yield estimates on wheat are too early to quantify, winter barley however is pegged at around 6 MT/ha and OSR at 3.6-3.8 MT/ha.

Weather worries in the US have eased considerably. WxRisk say: "Right now there is absolutely no indication of any kind that the serious heat (95+ degrees) that we saw in July over the Plains and at times in the Midwest will comeback into the Midwest before Aug 20. Unless the pattern begins to change soon over Eastern Canada and Greenland we may make it to the entire month of August without serious heat east the Mississippi River.

Egypt bought three cargoes of Russian wheat and one from Romania today at levels around USD262.00-262.50/tonne. It's interesting to see Romania featuring there, just to keep Russia on it's toes.

EU soft wheat export licences only rose by 157 TMT this week, almost 60% down on a week ago, taking total year to date exports to 1.13 MMT. Imports meanwhile are running at almost double that total - 2.18 MMT - a year ago that figure was just 146 TMT.