EU Wheat Stuck In Sideways Mode - For Now
20/10/11 -- EU grains finished mostly lower with Nov London wheat down GBP0.65/tonne to GBP146.75/tonne and Nov Paris wheat down EUR0.50/tonne to EUR185.50/tonne.We seem to be stuck in a narrow sideways mode at the moment, with London wheat closing within a GBP5.00/tonne band of GBP146-151.00/tonne for the whole of the month so far.
That could all change on Monday however depending on how things go in Sunday's summit of European leaders. Early week confidence in decisive action has already given way to an air of resignation that it could just be another load of hot air and posturing, with each side ultimately looking after their own personal interests.
Following yesterday's meeting between new Dad and French President Nicholas Sarkozy and German Chancellor Angela Merkel the two main protagonists seem further apart not closer together on the issue.
Strategie Grains increased their forecast for this season's EU-27 corn crop to a record 63.4 MMT, and also upped their soft wheat production estimate too. In addition they are forecasting 500,000 ha of land coming out of set-aside to boost plantings here by 700,000 ha for the 2012 harvest.
News of Ukraine's President finally approving the lifting of export taxes on wheat and corn met with relative apathy today, which surprises me as I think that this is a major blow to EU export ambitions.
Brussels granted 296,000 MT of EU soft wheat export licences in the past week, bringing the 2011/12 YTD total to 4.35 MMT, 44% down on last year and placing us on target only to export little more than 14 MMT this season. EU wheat imports meanwhile currently stand at 2.61 MMT, more than 250% up on this time a year ago.
