EU Grains Close Week With Little Change

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

08/06/12 -- EU grains closed narrowly mixed Friday, with Jul 12 London wheat down GBP0.50/tonne to GBP171.50/tonne and Nov 12 GBP0.25/tonne firmer at GBP157.00/tonne. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 decided to also join the unchanged club closing at EUR209.50/tonne.

For the week as a whole Jul 12 London wheat up GBP0.50/tonne and Nov 12 GBP2.25/tonne. Aug 12 Paris wheat was unchanged and Nov 12 was EUR0.75/tonne higher.

It's been a lacklustre week here in the UK with the markets closed Monday and Tuesday, with trading in Paris also relatively subdued, whilst it's been another choppy week over in the US.

FranceAgriMer say that taking winter losses into account the soft wheat harvested area there is expected to have dropped 5.4% to 4.72 million hectares this summer. French barley plantings have climbed 16% this year to 1.79 million hectares from 1.55 million hectares in 2011 and the spring corn harvested area is seen rising 6.1% to 1.64 million hectares.

May rains have continued into June, with French soft wheat crop ratings steadily improving, France AgriMer now rate 72% of the crop as being in good/excellent condition - up 7 percentage points in the past four weeks.

Following a string of varied, and mostly fairly bullish, forecasts on Russian grain production potential this week, SovEcon today came out with a plausible 87 MMT harvest total, of which 53 MMT will be wheat. That's a cut of 7.6% on total grain output, and a reduction of 5.7% for wheat.

Russia's export potential will decline much more steeply however. In the case of total grains to 18 MMT, a third less than in the current marketing year, with wheat accounting for 14 MMT of that (down 30%), they said.

Offical estimates still peg the 2012 grain harvest at around 92-94 MMT, with exports totaling 21-23 MMT.

The Ukrainian Agrarian Business Club estimate Ukraine’s 2012/13 grain output at 46-47 MMT, down around 18% on last season's 56.7 MMT.

Meanwhile the European crisis rumbles on. Fitch downgraded Spain’s credit rating by 3 notches yesterday and the word on the streets tonight is that the Spanish government will make a formal request for EU aid for its stricken banking sector over the weekend whilst the markets are closed. Estimates as to how much they may need are anywhere between EUR30-100 billion.