EU Wheat Close

Posted by Nogger - a legend in his own mind at 19:10 | Categorized as

07/09/11 -- EU grains finished firmer with Nov London wheat up GBP1.50/tonne to GBP170.50/tonne and Nov Paris wheat ending EUR0.75/tonne higher at EUR206.50/tonne.

After losing GBP5.75/tonne in four sessions (and EUR 5.50/tonne in the case of Paris wheat) London decided that it was time for an up day today, although this was hardly a convincing performance.

US futures were higher for most of the day in their usual "Turnaround Tuesday" mode. OK we know it's Wednesday, but as America was shut on Monday it is only Tuesday in a funny sort of way.

The French Farm Ministry raised their soft wheat production estimate from 32.5 MMT to 33.5 MMT and corn production from 13.3 MMT to 14.1 MMT.

Egypt bought 300,000 MT of Russian/Kazakh wheat, once again shunning French origin, with US wheat not even being offered. French wheat was priced around USD10/tonne more expensive than Russian wheat on an FOB ex origin basis, and there is also usually a freight disadvantage too. Not as bad as things have been, but no coconut either.

Western Australia, usually the largest producing state Down Under, looks set for a bumper wheat crop this year. In addition significant rains forecast for Thursday and Friday over the southern half of Queensland and New South Wales will aid dryness concerns there.

The wheat harvest on the Canadian Prairies is said to be progressing well.

Crude oil jumped more than USD3/barrel as EU debt worries took a bit of a back seat for the first time this week. A series of major storms heading for the Gulf of Mexico was also a factor.

Merchants, co-ops, traders and consumers alike all seem to be saying the same thing. The markets are so volatile, unpredictable, and governed by outside influences that they've given up second guessing which way they will go next.