EU Wheat Close

05/10/11 -- EU grains finished higher for a change with Nov London wheat up GBP2.40/tonne to GBP148.50/tonne and Nov Paris wheat climbing EUR3.00/tonne at EUR185.25/tonne.

The euro was firmer, despite a credit rating downgrade for Italy, with the pound slipping below 1.16 against the single currency.

Some kind of a correction seemed in order after recent declines, and outside influences such as crude oil and stock markets posted decent gains. European debt problems have certainly not gone away however.

FSU crops keep getting bigger with Russia now saying it expects a 95 MMT grain harvest, with wheat accounting for 60 MMT of that - a 45% increase on last season. Russia also said that it exported 3.4 MMT of grain during the Sept 1st-28th period, bringing cumulative exports for the marketing year to date to 9.2 MMT.

Neighbouring Kazakhstan has now produced 23.3 MMT of grains off 88.3% of the planted area, suggesting a final crop in excess of the government's target of 25 MMT.

Ukraine has a big crop of it's own too and is itching to get it's name accepted again by the world's largest wheat buyer - Egypt. They actually undercut Russia in last week's Egyptian tender, but the north African nation are still mulling their credentials as a supplier.

US futures came in sharply higher in afternoon trade, which lent some support to EU grains, although the bulls have had an enormous volume of wind taken out of their sails of late and are very cautious of getting too carried away.

There's a long weekend coming up in the US and next Wednesday we have the release of the October WASDE report from the USDA which may include upward revisions for US corn and soybean production if recent private estimates are anything to go by.