EU Wheat Nudges Higher

29/11/11 -- EU grains ended higher with Jan 12 London wheat up GBP1.05/tonne to GBP144.50/tonne and Jan 12 Paris wheat rising EUR1.00/tonne to EUR181.25/tonne.

The market appears to be taking a bit of a breather so far this week, with the bears not having the stomach to press things lower but the bulls lacking the conviction to get their buying boots out after a torrid last six months.

The euro was back under pressure again on reports that today's meeting of EU finance ministers may not offer as much as the market was hoping for. Indeed, there are some suggestions that they may not even be able to match what was promised last month.

There was also some gossip that a widely tipped cut to France's credit rating was due within days.

Italy ended up paying a yield close on 8% in an auction of EUR3.5 billion of three year bonds, the highest rate in fifteen years.

France's highest court has ruled that an agriculture ministry ban on growing GM corn there is illegal. The government says that it will "examine all ways" to keep the ban in place for next season.

Russia's wheat harvest came in at 59.4 MMT in bunker weight, 37% more than last year, according to the ministry there. They also had a barley crop of 17.7 MMT in bunker weight which is more than twice the volume harvested in 2010.

Those figures suggest clean weight crops of around 57.4 MMT and 16.8 MMT respectively. If correct both would be a bit higher than current USDA estimates.

Ukraine's grain exports have accelerated to 2 MMT so far in November, bringing the 2011/12 marketing year to date volume up 53% on last season to 6.8 MMT.

Argentina says that it will clear 2.7 MMT of old crop wheat for export next week. That will be in addition to the 3 MMT that has already been authorised. Argentine wheat is probably the cheapest in the world on an FOB basis right now. Or, sorry Kazakhstan, the cheapest in the world of any country that has a coastline.