EU Grains Close

05/08/11 -- EU grains finished with Nov London wheat down GBP1.60/tonne to GBP159.65/tonne and Nov Paris wheat EUR1.25/tonne lower at EUR195.50/tonne.

At the end of another volatile week Nov London wheat shed GBP4.00/tonne and Nov Paris wheat EUR2.25/tonne. For London wheat a front month has only closed lower than this once since early October 2010.

After trading higher early in the week, global economic jitters took over in the latter half of the week to send grains tumbling. We now have a full weekend to wait to see what the world thinks of America losing it's AAA credit rating with Standard & Poor's on Friday night. It's now rated AA+ with a negative outlook.

There hasn't been a great deal of progress made with the French wheat harvest this past few days as rains return to the north of the country with harvesting stuck at around 75% complete.

The French Ministry have increased their wheat production estimate from 32 MMT to 32.5 MMT, a figure in line with other trade forecasts. They've also upped their OSR production estimate from 4.5 MMT to 5 MMT on the back of much better than expected yields.

We know what they mean, with the HGCA increasing their UK rapeseed yield to 3.6-3.8 MT/ha, 15% higher than the 5-year average, suggesting a record 2.6-2.75 MMT crop using Coceral's 720,000 ha planting estimate.