EU Grains End Week Little Changed

14/10/11 -- EU grains finished mostly a little higher to end the week with Nov London wheat up GBP0.30/tonne to GBP146.50/tonne and Nov Paris wheat climbing EUR1.75/tonne to EUR184.75/tonne.

On the week as a whole there wasn't a lot of change with Nov London wheat finishing GBP0.25/tonne lower and Nov Paris wheat rising EUR1.25/tonne.

Brussels granted soft wheat export licences for an uninspiring 218,000 MT this week bringing the 2011/12 marketing year total to 4.1 MMT, 42% down on where we were at this point last year.

At this pace we are only in line to export 14.2 MMT in the current season, 11% less than the USDA's current forecast of 16 MMT and 29% down on 2010/11's total of 20.1 MMT.

The collective weight of availability out of Russia, Kazakhstan and Ukraine already looks set to hang over the European market through into the spring, and possibly even next summer.

The grain harvest in Kazakhstan now stands at 26.7 MMT with less than 5% of the crop still to bring in. Wheat accounted for 85% of the planted area in 2011, implying a crop of around 23 MMT this year. Even allowing for cleaning and screening that's well above the USDA's recently revised estimate of 19 MMT.

Ukraine are still waiting for President Nikolai Azarov to formally sign documentation lifting the duty on wheat and corn exports which was approved by parliament last week. Once passed there will surely be a surge in cheap offers coming out of here too, which are likely to undercut their FSU neighbours.

The USDA this week increased their Ukraine corn export forecast for the current season by 2 MMT from last month to 12 MMT, a 140% increase on 2010/11.