EU Grains Mostly Higher

13/01/12 -- EU grains shrugged off yesterday's declines recovering to finish mostly higher with Jan 12 London wheat up GBP3.50/tonne to GBP155.50/tonne and Mar 12 Paris wheat rising EUR3.00/tonne to EUR197.00/tonne.

For the week as a whole nearby London wheat was up GBP3.75/tonne whilst Paris wheat lost EUR4.00/tonne on the continuous chart, courtesy of January expiring mid-week. Mar 12 Paris wheat gained EUR1.75/tonne on the week, whilst Mar 12 London wheat rose GBP3.15/tonne.

Based on this close we have the curious situation where soon to go off the board January London wheat is now a premium to March and parity with May.

The euro had improved steadily throughout the week, buoyed by successful Spanish and Italian debt auctions. However the single currency gave up most of those gains today, with the pound rising from under 1.1950 to close to 1.2100 in late afternoon trading.

The single currency also slumped to fresh 16-month lows against the US dollar as rumours circulated that a credit downgrade was "imminent" for several eurozone countries.

In the end Standard and Poor's downgraded an assortment of countries late in the day, including a loss of it's prized AAA rating for France, criticising Europe's lack of decisive action to resolve the debt crisis.

The recent weakness of the euro is arguably one of the factors that has helped French origin grain make inroads at recent Egyptian wheat tenders. The latter bought three cargoes of wheat today, two from France and one from Russia.

The Buenos Aires Grain Exchange say that corn and soybean plantings there are only around 85% done, normally they'd be finished with corn by now and wrapping up with soybeans.