EU Wheat Rises Slightly But Remains In Narrow Range

Posted by Nogger - a legend in his own mind at 16:35 | Categorized as

15/12/11 -- EU grains ended mostly higher with Jan 12 London wheat up GBP1.25/tonne to GBP143.00/tonne, Jan 12 Paris wheat rising EUR1.00/tonne to EUR181.75/tonne.

Wheat opened lower following last night's stumble in Chicago, but managed to claw back into mostly positive territory by the end of the day, even if only marginally.

Farmers don't want to sell at these levels. Buyers are relaxed about buying, pointing to the fact that prices have fallen around a third in the past 7-8 months, so why should they be in a hurry? So we remain stuck in a tight narrow range.

Strategie Grains are predicting a rebound in EU-27 wheat production for 2012 with a crop here of 142.4 MMT, a 3.6% increase on this year. They are forecasting a total EU-27 grain crop of 290 MMT, some 5 MMT up on 2011.

Wheat production will rise in western Europe in 2012, where crops in France, Germany and the UK were adversely affected by drought in the spring and early summer of this year, they forecast.

EU-27 barley production will rise 2.4 MMT to 54.5 MMT, whilst corn output will fall by a similar amount to 62.2 MMT, they add.

The EU issued 252 TMT of soft wheat export licences for the week to Dec 13th, whilst that is up on last week's very poor showing it's still pretty modest. That takes the year-to-date total to 6.9 MMT, 35% down on last year. Cumulative wheat imports of 2.8 MMT meanwhile are 130% up on year ago levels.

Ukraine confirmed a record 2011 clean weight grain crop of 56.4 MMT, of which 22.4 MMT is wheat (up 33% on last year) and 22.3 MMT is corn (+87%). They will be very aggressive marketeers of corn in particular in 2011/12 as this is easily the largest crop they've ever had and domestic consumption is less than 8 MMT.

Russian analysts SovEcon upped their estimate of 2011 grain production there by 2 MMT to 92 MMT, increasing their wheat crop number by 1 MMT to 56.5 MMT - a 36% rise on last year.