EU Wheat Close
23/08/11 -- EU grains finished higher with Nov London wheat up GBP3.00/tonne to GBP169.00/tonne and Nov Paris wheat ending EUR4.50/tonne higher at EUR207.75/tonne.
This was the highest close for a front month on London wheat since early July and the best for Paris wheat since June 21st.
Stocks were higher on optimism that the US will introduce further QE measures on Friday. Exactly where the money is going to come from appears to be being largely ignored, as too are the implications behind doing so.
US housing data disappointed again, hurricane Irene is set the be the first to seriously threaten the US in three years and the east coast has now suffered a 5.9 earthquake shortly after the close of European markets.
The potential damage from the latter two could drain more money from US coffers already wildly overdrawn. President Obama and Bernie Madoff, you never see them in the same room at the same time do you?
Still, we don't need to worry about all that right now. If we hum loudly enough and put our fingers in our ears it isn't really happening is it? As one wag has just posted on Twitter there wasn't really an earthquake at all it was just the Fed's printing presses starting up.
Russia sold another three cargoes of wheat to Egypt, priced around USD20-25/tonne cheaper than French wheat when freight is also factored into the equation. Even so that has halved the gap from where things where back in early July when the Russian export embargo was first lifted.
Ukraine says that it's early grains harvest is just about over producing 34.2 MMT, a 30% increase on last year. Wheat accounts for 23.2 MMT of that and barley 9.5 MMT, they say. Both numbers are significantly higher than the latest USDA projections yet they have been a relatively passive marketeer in the past couple of months.
