EU Wheat Declines, But Ends Well Off Session Lows

02/02/12 -- EU grains finished mixed with front month Mar 12 London wheat down GBP0.10/tonne to GBP167.00/tonne and Mar 12 Paris wheat down one euro to EUR215.75/tonne.

Wheat was down all day on ideas that prices have got a bit ahead of themselves stifling demand. End user interest is very thin on the ground at these levels, with merchants reporting that most of the calls coming in today are from farmers wanting to sell at yesterday's levels.

Even so the close was well off session lows, just as yesterday's finish was well off session highs. Mar 12 London wheat was GBP3.35/tonne lower at one stage with Mar 12 Paris wheat showing a decline of EUR4.00/tonne at one point.

Very cold temperatures are gripping most of Europe, giving rise to winterkill fears for crops without a protective snow covering. Most of European Russia is however well insulated from the cold under 35 cm of snow, says the the Federal Hydrometeorological Centre there.

The anticipated announcement on Russian grain exports was not forthcoming, with some reports suggesting that it has been deferred until tomorrow. Some are expecting a ban, but others think that a reassessment of the current suggested maximum export ceiling of 24-25 MMT is more likely, and that this self-imposed limit could in fact be raised.

Stony silence was also the order of the day in Athens, where negotiations between the government and private creditors drag on, despite repeated insistence from Greek officials that a deal is a "formality".

Elsewhere India has revised it's 2012 wheat production estimate up to a record 88.3 MMT, a 2.8% increase on last year. Harvesting there is expected to begin in around six weeks time.

Jordan bought 150,000 MT of unspecified origin wheat in a tender, but other international orders are scarce.

Around 400,000 MT of grain is said to be sitting on demurrage off the coast of Iran after the recently introduced sanctions against them brought trade with the Arab nation to a sudden and grinding halt.