EU Wheat Declines On More Consolidation

28/03/12 -- EU grains finished lower with May 12 London wheat down GBP1.40/tonne at GBP172.65/tonne. New crop Nov 12 was GBP1.70/tonne lower at GBP159.75/tonne. May 12 Paris wheat closed down EUR2.00/tonne to EUR211.25/tonne.

It feels like today was more consolidation and profit-taking ahead of Friday's important USDA data. Nobody appears confident of what that might bring, with anything from outrageously bullish to stunningly bearish and everything in the middle possible.

One report I read said that Chicago corn has touched a limit move, one way or the other, in six of the last seven years that this report has been issued. That doesn't seem to mean that it has closed limit up or limit down, but it has traded at the daily limit at some point during the session.

We can only wait and see what Friday will bring, but history would appear to suggest that something dramatic, one way or the other, may be statistically likely.

Meanwhile Egypt bought one cargo each of US and Argentine wheat in it's latest tender today. The former was reportedly at USD262.84/tonne and the latter at USD259.35/tonne. For the record, the cheapest French wheat offered was at USD300.00/tonne. Russian and Ukraine origins were also passed on.

The HGCA made some tweaks to the UK 2011/12 supply and demand balnce sheet today, cutting domestic Human and industrial (H&I) wheat consumption by 46TMT due to lower demand from the ethanol sector than previously anticipated.

They indicated that they don't expect Ensus to operate this side of June, but suggested that "there are strong expectations that the plant being commissioned at Hull could process wheat this season."

"Wheat usage as animal feed is forecast at 6.45MMT, up 5% on 2010/11 but down 35TMT on January’s estimate," they added.