Nogger's Blog

12/12/11 -- EU grains ended mostly lower with Jan 12 London wheat down GBP1.25/tonne to GBP141.00/tonne, Jan 12 Paris wheat down EUR0.25/tonne to EUR179.25/tonne.

EU wheat continues to work its way gradually lower as traders try to work out the consequences of the news coming out of Europe in the aftermath to Friday's conclusion to the leaders summit.

The market seems to think that the "deal" thrashed out maybe doesn't do enough to help immediate solvency problems, with the euro declining to its lowest levels against the pound since February.

In addition to the news emanating from Brussels on Friday we also had a raft of bearish data from the USDA to digest, including record world wheat production and ending stocks up 6 MMT from last month to the highest levels in more than a decade.

Faced with such a deluge of bearish information wheat actually put up quite a resilient performance today, sufficient to get some traders speculating that maybe the market is trying to form a bottom here.

Australian growers continue to battle against harvest rains which threaten to make more of their crop only suitable for feed grade with each passing day. That may be slightly supportive for milling wheat.

Dryness in eastern Argentina and southern Brazil is a possible threat to corn production there, although it's early days yet. Some are talking of a building La Nina to bringing summer heat and dryness to the region.

Jordan are tendering for 100,000 MT each of wheat and barley with the results due next week.

Ukraine's grain export pace is accelerating, as they shipped out almost 400,000 MT in the first week of the month, bringing the marketing year to date total to 7.3 MMT, a third up on this time last year.