EU Wheat Close
24/08/11 -- EU grains finished mixed with Nov London wheat unchanged at GBP169.00/tonne and Nov Paris wheat ending EUR1.00/tonne lower at EUR206.75/tonne.
It was a topsy-turvy day with wheat both sides of the Channel trading both higher and lower throughout the course of the day.
The EU’s Monitoring Agricultural Resources unit (MARS) dropped their forecasts on EU-27 wheat and barley production this season slightly from last month, although both estimates are still well ahead of USDA projections.
Wheat yields in the UK are seen averaging 7.78 MT/ha, down 3.4% on last year. Barley yields are forecast at 5.67 MT/ha, down 5.5%. Both are substantially better than what was expected a few months ago.
StatsCanada pegged all wheat production there at 24.1 MMT compared with 21.5 MMT from the USDA.
Between the EU, Canada, Russia, Ukraine and Kazakhstan it is not too difficult to add 15 MMT more wheat to the global bottom line than the USDA currently estimate. That's roughly equivalent to the entire US spring wheat crop, so why the market is so fixated on losses there is a bit of a mystery.
The German harvest is still dogged by rain, with an estimated 20-30% of the wheat crop still out in the field.
Although Russian wheat prices have recovered from their post-export ban lows offers there were still some USD20.00/tonne cheaper than French wheat at yesterday's Egyptian import tender.
Kazakhstan's harvest has only just begun but they will be aiming to export significant volumes of wheat before long after the government there agreed to provide USD40.00/tonne transport subsidies to help the land-locked nation compete with their Russian neighbours.
