EU Wheat Falls Again On More Negative News
21/11/11 -- EU grains ended lower once more with Nov 11 London wheat down GBP1.30/tonne to GBP141.30/tonne and Jan 12 Paris wheat falling EUR2.00/tonne to EUR180.00/tonne.The market fell on a bombardment of negative outside news. Reports that a bipartisan super committee have failed to reach agreement on cuts to the US budget deficit sent stock markets tumbling.
The strongest talk yet that France's AAA credit rating was ripe for a downgrade added to the risk off mentality, as did news of Hungary asking the IMF/EU for financial assistance and China's Vice Premier Wang warning that the global economic outlook remains grim.
Crude oil was lower and the afternoon Chicago market failed to offer any support, with corn falling below the important USD6.00/bushel level on the opening, where it stayed for most of the remainder of the session.
Egypt bought Black Sea wheat once again over the weekend, although it has to be said that the differentials between that and French wheat have narrowed over the past week.
The world export market remains very competitive. Ukraine has reportedly exported 1 MMT of corn in the past fortnight, as much as it shipped in the whole of the four months of July/October.
The Russian grain harvest is likely to come in at around 92-93 MMT in clean weight says First Vice Prime Minister Viktor Zubkov, an increase of more than 50% on last season.
The US announced weekly export inspections for wheat of only 11.6 million bushels today, 31% below the 16.6 million needed to meet the USDA's target for the season.
