EU Wheat Manages Modest Revival

22/11/11 -- EU grains finished mostly higher for once, with Nov 11 London wheat up GBP1.95/tonne to GBP143.25/tonne and Jan 12 Paris wheat rising EUR1.25tonne to EUR181.25/tonne.

It was hardly what you would call a major reversal of the strong downtrend that we have been stuck in since the spring, but the few remaining bulls will take anything that comes their way at the moment.

Profit-taking, a minor correction, call it what you will. The bottom line is that London wheat has fallen by more than a third from it's April highs, and Paris wheat by marginally less than that, 32%, from it's spring high set in early May.

The eurozone debt crisis continues to be the main driver in the market. Yields on Spanish three-month bills more than doubled to 5.11% today, from 2.29% at a similar auction held in October. They are now paying more to finance their debt than Greece or Portugal.

London wheat fared a little better than it's Parisian counterpart as sterling sunk to a six week low versus US dollar and a three week low against the euro.

Ukraine announced a record grain harvest of 55.4 MMT to date, and also said that it will plant an additional 2.3 million hectares of spring grains due to damage to the recently sown winter crop there.

The Russian grain harvest now stands at 97.5 MMT in bunker weight, according to their Minister of Agriculture and will likely come in at 92-93 MMT in clean weight says their vice PM - an increase of more than 50% on last year.

Nov London wheat goes off the board tomorrow.