EU Wheat Rangebound

02/11/11 -- EU grains ended mixed with Nov London wheat up GBP1.15/tonne to GBP148.90/tonne and Nov Paris wheat climbing EUR1.76/tonne to EUR189.50/tonne.

There was a dearth of fresh fundamental news and the market seems to be stuck in a narrow sideways mode. Front month London wheat has traded within the range of GBP146-153/tonne for the last twenty four trading sessions. Nov 11 Paris wheat has been stuck in the EUR185-192/tonne range for a similar length of time, and an even narrower EUR185-190/tonne range for the last sixteen sessions.

The weak euro is supporting Paris wheat, even though there has been little recent evidence of it boosting exports significantly - if at all.

Extreme nervousness and caution over the European debt issue remains.

Greek PM George Papandreou is to meet with French President Nicolas Sarkozy and German Chancellor Angela Merkel today ahead of the start of tomorrow's two day G20 summit in Cannes. Both were said to have been shocked at Greece's sudden announcement that they would put the acceptance of last week's bailout terms to a public vote.

The storm clouds are also gathering over Italy who's central bank is said to be launching an emergency operation to swap bonds held by the nation's banks for ones with a longer maturity.

The Italian cabinet is said to be holding an emergency meeting tonight to discuss it's own spiralling borrowing costs. They're being asked to pay seventeen times more on one year loans than Germany at the moment and have shown little real enthusiasm for pushing through their own austerity measures.

US corn futures turned lower in late afternoon trade after analytical firm Informa Economics increased slightly their estimate for this season's US corn crop to 12.549 billion bushels using a yield of 149.5 bu/acre. In round figures that places the crop some 3 MMT higher than the USDA's October forecast.

Recently planted winter wheat in Western and Central Europe are looking in pretty good shape by and large, and rain moving in from the west in the next ten days should help alleviate pockets of dryness in some areas. Eastern Europe and Ukraine though could desperately do with a drink.