EU Wheat Close
26/08/11 -- EU grains finished higher with Nov London wheat up GBP1.80/tonne to GBP171.75/tonne and Nov Paris wheat ending EUR1.50/tonne firmer at EUR210.25/tonne.
On the week as a whole London wheat gained GBP8.20/tonne and Paris wheat EUR8.50/tonne. For London this was the first close above GBP170.00/tonne for a front month since July 7th and for Paris wheat the first close above EUR210.00/tonne for a front month since June 21st.
The market seems to want to go higher, led by prices in Chicago, based on widespread reports of lower potential yields for corn and soybeans than the USDA currently project this year.
The IGC yesterday increased its world wheat production estimate for 2011/12 by 3 MMT to 677 MMT, pegging ending stocks at 191 MMT, the second highest in the last ten years.
Rain continues to hamper the German harvest. Agritel say that OSR production there may fall below 4 MMT this year from 5.75 MMT in 2010. Wheat production and quality could also be downgraded.
Russia dismissed talk that it may consider grain export duties, saying that the market will regulate itself once Ukraine and Kazakhstan enter the export arena. Frustrated at missing out on recent sales, Ukraine says that it is considering lifting its existing export tariffs.
US Fed Charmian Ben Bernanke frustrated the markets by saying that further QE measures won't even be discussed until September 20 and 21.
