EU Wheat Closing Comments

Posted by Nogger - a legend in his own mind at 19:23 | Categorized as

07/05/12 -- EU grains finished mostly lower although London wheat was closed for a belated May Day holiday. May 12 Paris wheat ended down EUR3.25/tonne at EUR216.75/tonne, new crop Nov 12 was down EUR1.00/tonne to EUR194.75/tonne.

For new crop Nov 12 Paris wheat this was the lowest close in two months as the coming season's harvest hopes rise on improving prospects in Western Europe and the US.

Much of the SE of England, and most of France and Spain have had between two and six times their normal rainfall totals in the past 14 days, according to Martell Crop Projections.

US production hopes have also improved significantly since winter wheat went into dormancy, with abundant rains in recent months boosting hopes that the top producing state of Kansas will have a record yield this year.

Weekend election results in France and Greece knocked the euro to its lowest levels against the pound since November 2008. New French PM Francois Hollande is likely to less willing to climb into bed with German Chancellor Angela Merkel than the ousted Nicolas Sarkozy.

That potentially threatens the uneasy accord that has been struck within the fiscally mired Eurozone of late. Meanwhile Greece faces political and financial turmoil after the pro-austerity parties took a thrashing at the polls.

The market is already suggesting that a new coalition Greek government is unlikely to have enough support from the pro-austerity sector to push through the necessary spending cuts needed to qualify for the next tranche of EU bailout funding.

With each week that passes the new 2012/13 marketing year gets closer. The USDA will issue their first production estimates for the coming season on Thursday this week. US analytical firm Informa Economics on Friday forecast word corn production in 2012/13 at a record 932 MMT, which is 67 MMT (or 7.6%) up on last year. That's well above the IGC's April estimate of 900 MMT.