EU Wheat Declines On Market Jitters

Posted by Nogger - a legend in his own mind at 19:35 | Categorized as

07/03/12 -- EU grains finished mostly lower with front month Mar 12 London wheat falling GBP1.35/tonne to GBP165.65/tonne and Mar 12 Paris wheat down EUR2.25/tonne to EUR214.50/tonne.

The market is more than a little nervous ahead of tomorrow night's deadline for Greece to get it's required 75% of bondholders to agree to swap their existing bonds for new debt.

We also have the USDA out on Friday with their latest world supply & demand numbers.

Considering that world wheat stocks are currently projected to be at their levels in history these are still pretty lofty heights for wheat. Hence profit-taking ahead of the next couple of days in the absence of fresh supportive fundamental news was probably understandable.

ABARES yesterday said that after two back-to-back record harvests in Australia they will end 2011/12 with 10 MMT of wheat to carryover into next season, around three or four times more than normal.

The size of this carryin plus an estimated production of 26 MMT in 2012/13 dwarf domestic consumption of around 7 MMT, meaning that Australia looks set to be an aggressive exporter again next season.