Nogger's Blog

16/11/11 -- EU grains ended higher with Nov 11 London wheat up GBP1.30/tonne to GBP147.30/tonne and Jan 12 Paris wheat EUR1.50/tonne firmer at EUR186.50/tonne.

Yields on Italian and Spanish bonds were down a little on fervent ECB buying, providing some respite from recent woes. Europe's problems haven't gone away though. UK unemployment rose above 2.6 million and those out of work in the 16-24 age group is up in excess of 1 million for the first time ever.

Bank of England Governor Mervyn King warned of a worsening economic outlook and said that he expected markedly weaker growth than predicted in the summer.

Defra say that the UK produced 15.36 MMT of wheat and 5.64 MMT of barley in 2011, both estimates are virtually identical to the latest USDA figures. With feed wheat and feed barley currently trading at or around parity they see wheat usage in the animal feed sector up 5% on last year at the expense of barley.

In contrast, the HGCA have increased the size of the UK's exportable wheat surplus to 2.72 MMT citing a lower estimate for feed use, "based in part on better availability of forage crops," according to Agrimoney.com.

Agrimoney go on to say that the HGCA's balance sheet calculations include an "assumed restart date" for Ensus of "February-March 2012", which would mean the plant, being mothballed for some 10 months – more than twice as long as the site originally envisaged.

Elsewhere the Ukraine Ministry have increased their 2011 grain harvest estimate to 55 MMT. Faced with a corn crop likely to be almost double that of last year Ukraine exporters have been aggressive marketeers following the lifting of export duties on corn and wheat last month securing the sale of 800,000 MT of corn to the normally US stronghold of Japan today.