EU Grains Close

21/06/12 -- EU grains closed mostly higher with Jul 12 London wheat up GBP1.25/tonne to GBP179.75/tonne and Nov 12 also GBP1.25/tonne firmer at GBP159.75/tonne. Aug 12 Paris wheat closed EUR1.75/tonne firmer at EUR212.00/tonne, whilst Nov 12 was EUR1.75/tonne higher at EUR214.25/tonne.

This was the highest close for Jul 12 London wheat since early September 2011, and the best for a front month in a year. New crop Nov 12 London wheat posted its best closing level in exactly a month.

Pretty impressive, and ever so slightly bizarre, considering that outside markets offered little in the way of support. It was quite the opposite in fact, with Brent crude slumping to an 18-month low and US WTI crude down below USD80/barrel for the first time in more than 8 months.

Reports that Algeria bought 600,000 MT of optional origin wheat, thought likely to be French material, was supportive today. Apart from that though there was precious little fresh bullish news about.

The general consensus seems to be that EU wheat and barley production prospects are greatly improved following widespread and heavy rainfall throughout most of the region in the last 8-10 weeks.

Much more rain could however start to damage quality before long. Yields however will surely beat last year in many of the major producing countries.

RMI Analytics described the condition of French barley as "superb" - according to a report on "French crops looked fabulous...We were seeing levels of 1,000-1,200 ears per square metre – unbelievable."