EU Wheat Mostly Cautiously Higher

01/12/11 -- EU grains ended mixed although wheat was mostly higher as Jan 12 London wheat finished up GBP1.40/tonne at GBP144.05/tonne and Jan 12 Paris wheat ended EUR0.75/tonne higher at EUR179.25/tonne.

New crop Paris wheat was a little lower, as too were most months on corn, rapeseed and malting barley.

The European debt crisis remains the key driver. Support today came from news of Spain and France auctioning off debt at better levels than last week. We are still probably only one or two pieces of proper bad news away from a full blown Armageddon.

Ukraine says that it has brought in a record clean weight 54.5 MMT grain harvest this year. Foreign sales are increasing, with November exports at 2.2 MMT - the highest of the marketing year so far.

Russia is already turning its attention to 2012. Influential analysts SovEcon are prediction a winter wheat crop of 39.5 MMT, a 14% increase on 2011. They also increased their forecast for 2011/12 grain exports by 2 MMT to 24.5 MMT.

IKAR say that Russia has exported a record 14.1 MMT of grains in the Jul 1st - Nov 20th period, of which 12 MMT was wheat.

At home, the HGCA say that despite "unseasonably mild weather and below average rainfall in many regions" this autumn, crops are largely in good condition heading into winter.

"Early drilled crops of winter wheat are now well established with lush growth," they add.

US wheat shipments continue to lag. Based on the mean of exports over the last 8 weeks the US will ship 23.3 MMT of wheat in 2011/12 - well below the 26 MMT currently forecast by the USDA.