EU Wheat Awaiting News From USDA And Argentina
10/01/12 -- EU grains finished mixed with Jan 12 London wheat up GBP0.35/tonne to GBP154.90/tonne and expiring Jan 12 Paris wheat rising EUR0.50/tonne to EUR203.25/tonne.Fresh news was pretty thin on the ground, rains are set to arrive in Argentina today and last through to Friday with varying amounts of a quarter of an inch to up to 3 inches with 85-90% coverage.
The other big event of the week is Thursday's USDA report which will likely feature downgrades to South American corn and soybean production plus revised final estimates on 2011 US production and US all wheat acres. If that wasn't enough we'll also get new quarterly and 2011/12 ending stocks numbers too.
For the time being at least fund money seems to quite fancy getting back into the grains sector in 2012. The longevity of their renewed risk on strategy may well decide where we go next.
The EU still has the ability to upset the apple cart any time though. Ratings agency Fitch say that there is a significant chance that Italy will have its credit rating downgraded as soon as this month. Greece is trying to get private sector bondholders to accept a 50% haircut on debt in an attempt to get a second EU/IMF bailout.
South Korea's largest feedmiller has bought a couple of optional origin cargoes of feed wheat this week, at levels around USD60/tonne below the price of US corn (which it has also bought), indicating that it is watering down it's corn requirements with cheaper alternatives.
