EU Wheat Close

14/09/11 -- EU grains finished mixed with Nov London wheat down GBP0.50/tonne to GBP164.75/tonne and Nov Paris wheat ending EUR1.00/tonne lower at EUR202.00/tonne. There were some gains on new crop months (Nov 2012 onwards) for both London and Paris.

The euro was a little firmer, particularly against the pound, on hopes that German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou may be able to thrash out a solution to the Greek debt problem.

The pound stayed rooted below 1.58 against the dollar for much of the day on news of UK unemployment rising and union calls for mass strikes in protests over pension contributions.

The trade is still digesting Monday's USDA reports, in which they forecast amongst other things EU wheat exports in 2011/12 falling below those of Australia and Canada, placing us only fourth in the world's largest exporter of the grain this season, having been second on 2010/11.

Russia bought 420,000 MT of all Russian wheat in it's latest tender today at prices around USD278-279/tonne, that's some USD12/tonne or so lower than last week's purchases.

To me this kind of proves that whatever world prices do - up, down or sideways - whilst they still have wheat to sell Russia will just keep on undercutting things by ten dollars or so just to make sure that they get the business.

Exports from the Black Sea powerhouse are showing no sign of letting up any time soon, and it may take until the new year to see signs of any significant slowdown.