EU Wheat Close

15/09/11 -- EU grains finished sharply lower with Nov London wheat down GBP3.50/tonne to GBP161.25/tonne and Nov Paris wheat ending EUR5.25/tonne weaker at EUR196.75/tonne.

This was the lowest close for both in more than a month. Corn, rapeseed and malting barley also finished with hefty losses.

Another clean sweep for Russia in yesterday's Egyptian tender maybe highlighted the fact that they look set to continue to dominate the wheat export arena for some time yet.

The Russians have harvested 74.1 MMT of grain (in bunker weight) by Sept 13th off 69% of the planted area. That theoretically puts them on target for a final clean weight harvest of close to 100 MMT, much higher than current Ministry estimates and only 8 MMT shy of the post Soviet era record of 108 MMT set in 2008.

There was mixed news from French analyst Strategie Grains who cut their EU-27 soft wheat production estimate by 0.9 MMT to 129 MMT, they also reduced their estimate on milling wheat's share of the crop by 3.1 MMT to 83.5 MMT. That does however leave more feed wheat around to get rid of.

EU wheat export potential this season they only see at 15 MMT which is 1 MMT below the USDA and down by a third on last season.

Brussels confirmed weekly soft wheat export licences of 406 TMT during the past week bringing the year-to-date total to 2.93 MMT, 39% down on a year ago. In addition wheat imports are massively up on twelve months ago at 2.37 MMT, meaning that 11 weeks into the marketing year in reality we've only been a modest net exporter of little more than half a million tonnes of wheat. A year ago that figure was almost 4.5 MMT.

Strategie Grains also said that heavy summer rains had created "near perfect conditions" for the EU corn crop which is now forecast at a near record 61.7 MMT.