EU Wheat Falls Despite Greek Deal
21/02/12 -- EU grains finished mostly lower with front month Mar 12 London wheat inexplicably bucking the trend and climbing GBP0.50/tonne to GBP167.00/tonne. Mar 12 Paris wheat slumped EUR5.25/tonne to EUR211.75/tonne.Other London months closed with losses of GBP1.90/tonne on old crop and GBP2.20/tonne on new crop.
Mar 12 Paris corn closed down EUR3.75/tonne to EUR206.25/tonne, having finished at a five month closing high for a front month yesterday.
The market was lower throughout the morning, racing to close at or near session lows in late afternoon trade as US wheat and corn futures quickly capitulated on their first day back after a three day weekend.
Greece finally got it's second bailout deal, although already there is a felling that this particular tragedy is a long way from being over. The euro was a little firmer on the back of the news, but not dramatically so.
A warmer outlook for Europe eased any lingering winter kill concerns.
Rabobank forecast the US wheat acreage at 57 million, half a million higher than the USDA. The USDA are expected to indicate US corn plantings at around 94 million acres when it concludes it's Outlook Forum on Friday, a rise of more than 2 million.
The Food and Agriculture Organization say that Brazil will have a record 60 MMT corn crop in 2012, drought or no drought. High prices mean that production will be aided by an significant increase in planted area, particularly for second season corn, they say.
Russia reported that it has exported 19.8 MMT of grain so far this marketing year. They also sold 35,000 MT of wheat to Ethiopia overnight.
In Europe, consumers remain well covered with demand sluggish. "Feed orders is what I need, not more raw materials," said one fairly typical compounder today. March is a long and usually busy month, so we will have to wait and see how demand goes then, Easter then falls quite early. If the weather co-operates then offtake could fall off a cliff after that.
