EU Wheat Close

22/09/11 -- EU grains extended recent losses with Nov London wheat down GBP4.20/tonne to GBP156.55/tonne and Nov Paris wheat sliding EUR4.75/tonne lower at EUR192.00/tonne.

London wheat has now fallen GBP18.20/tonne, or more than 10%, since the end of last month, with Paris wheat down EUR19.25/tonne in the same period.

The entire global financial and commodity marketplace suffered another severe bout of the jitters after the US Federal Reserve failed to launch QE3 and issued warnings on the state of the US and world economy and banking sector.

The FTSE100 closed almost 250 points lower on the day, for a near 5% drop. The French and German stock markets fell by a similar amount.

Russia scored another clean sweep in today's tender in which Egypt bought 240,000 MT of wheat at prices in the region of USD261-263/tonne, around USD16/tonne cheaper than the USD277-279/tonne that they paid only a week ago.

All across the FSU production, stocks and export estimates are trending higher, significantly higher.

The Russian Grain Union says that even if Russia increases its grain exports to the maximum they will still end up with ending stocks of 25 MMT at the end of the current marketing year, according to a report on the HGCA website.

Kazakhstan's Ag Ministry today upped their 2011 grain harvest estimate to 25 MMT, more than double last year's effort and 6 MMT more than they reckoned just a month ago.

Ukraine meanwhile increased its grain harvest estimate to 52-53 MMT, up from 50 MMT previously and 39 MMT a year ago.

All of a sudden GBP200.00/tonne wheat seems an awfully long way away.