EU Wheat Slides On More European Debt Concerns

Posted by Nogger - a legend in his own mind at 16:40 | Categorized as

31/10/11 -- EU grains finished mixed but mostly lower with Nov London wheat falling GBP2.00/tonne to GBP151.00/tonne and Nov Paris wheat up EUR0.25/tonne to EUR187.00/tonne.

Widening market scepticism over the implementation of last week's European debt agreement saw yields on Italian and Spanish bonds jump, further increasing their borrowing costs.

The euro slumped close to 1.16 against the pound from a Friday close of below 1.14 which enabled Paris wheat to fare somewhat better than its London counterpart.

European stocks fell around 3% as market confidence evaporated.

US brokerage firm MF Global filed for bankruptcy protection, potentially one of the top ten largest ever bankruptcies in US history, adding to market jitters.

Market fundamentals have taken a bearish slant too, with Ukraine winning this weekend's Egyptian wheat tender.

In fact so far this season they have bought almost exclusively Black Sea wheat with the exception of 180,000 MT from Romania. In 2010/11 they took over 5.5 MMT of wheat from the likes of France, Canada, Australia, Argentina and the US. None of those sellers has had a look in so far in 2011/12.

Ukraine's Ag Ministry meanwhile upped their forecast for this year's grain harvest to a record 54 MMT, and sellers there are busy sharpening their pencils looking for orders now that export duties have been lifted on wheat and corn.