EU Wheat Rally Stalls

04/01/12 -- EU grains ended with Jan 12 London wheat down GBP2.80/tonne to GBP152.50/tonne and Jan 12 Paris wheat fell EUR6.25/tonne to EUR202.75/tonne. New crop London wheat was down GBP4.00/tonne.

It was a strange sort of a day which started off quietly but suddenly turned sellerish mid-morning. It's difficult to say exactly why.

Whatever the reason merchants are reporting increased farmer selling today after three weeks of upside during which Jan 12 London wheat had put on GBP14.30/tonne based on last night's close.

A German bond auction was fully subscribed to, but in a manner than many described as disappointing. The market now appears to be thinking to itself "hmmm, if they aren't falling over themselves to buy German bonds what are they going to make of France's EUR7-8 billion auction tomorrow?"

The euro sank to one year low against the pound, and very close to last week's yearly low versus the dollar on the news.

Some weather forecasters are turning wetter for Argentina, although not until next weekend. QT Weather are talking of "a swath of 1.25-4.00 inch (rain) totals over Cordoba, Sante Fe and Entre Rios" in Central Argentina for the 14/15th January.

Russian customs authorities report that the country has shipped out 17.9 MMT of grains to Dec 29th, including 14.8 MMT of wheat, 2.0 MMT of barley and 0.75 MMT of corn.

That still leaves more than 7 MMT left to go before they hit their suggested self-imposed limit of 25 MMT. Exports are expected to slow up a little now, partly due to seasonal problems and also as much of what is left to export is located further away from the ports.

Winter wheat crop conditions in the top US producing state of Kansas have improved to 53% good to excellent from 47% just over a month ago, with Oklahoma ratings also jumping to 63% from 56%, say the USDA.