EU Wheat Close

03/10/11 -- EU closed with Nov London wheat down GBP2.40/tonne at GBP148.25/tonne and Nov Paris wheat rising EUR1.75/tonne to EUR185.25/tonne.

It was a bit of a mixed bag sort of a day with wheat both sides of the Channel sharply lower mid-morning. Nov London wheat fell as low as GBP144.55/tonne - the lowest for a front month since the late July 2010.

Nov Paris wheat slumped as low as EUR178.50/tonne, also the lowest for a front month since late July 2010, before staging a late recovery as US grains improved on their overnight showing and the euro went down the tubes.

The pound was threatening to hit 1.17 against the euro by the close of play, a level it hasn't closed above since March, after Greece announced over the weekend that it wasn't going to get it's budget deficit down to the 7.6% of GDP target by the end of the year. That casts into doubt the likelihood of them getting their next tranche of EU/IMF bailout money.

Market fundamentals are starting to look a little bearish too, as well as outside influences. US weather on the southern Plains is seen as getting "the most significant rain this area has seen in months" say WxRisk.

Russia's grain crop is now forecast at 93 MMT by the head of the Russian Grain Union, who also sees export potential climbing to 25 MMT this season. The Kazakh harvest meanwhile stands at 22.2 MMT so far, 86% up on last year's final total with 13% of the planted area still to be cut.

Spot UK ex-farm feed wheat levels are now down to around GBP140.00/tonne, with new crop Aug12 prices sub-GBP130.00/tonne. Farmer selling will be light to say the least at these levels.