EU Wheat Flat Awaiting News On Debt Crisis Plans

06/12/11 -- EU grains ended narrowly mixed with Jan 12 London wheat unchanged at GBP143.00/tonne and Jan 12 Paris wheat also unchanged at EUR179.75/tonne.

The market is still waiting for European leaders to put some flesh on the bones of their plans to resolve the debt crisis, and seems to be prepared to give them the benefit of the doubt and wait to give them one last shot at them pulling a rabbit out of the hat on Friday.

Hence another low volume day with very little price movement. Whilst we are treading water waiting for news from these outside markets, the grain market fundamentals are starting to stack up against a push higher though.

Australia's ABARES today said that this season's wheat crop would be a record 28.3 MMT. September/October rains may have damaged quality in some cases, but they've certainly helped yields it would appear. Their estimate is 2.3 MMT more than the USDA projected last month.

There's talk now of record Australian wheat exports of 21.6 MMT in 2011/12 from a nation still carrying a huge inventory of leftover grain from last season. That would see them stand above Russia, the EU-27 and Canada as second only to the US in terms of global wheat sales.

StatsCanada were also out with revised production estimates today, pegging the wheat crop there at 25.26 MMT, more than a million tonnes higher than their previous forecast and that of the USDA, and more than two million up on 2010/11.

Egypt bought four cargoes of wheat on the export market today, with Russia only getting the nod for just the one and Argentina sharpening the pencil to pick up the vote for the other three despite an enormous freight disadvantage.

The Russian wheat was priced at around USD244.50 FOB, with the winning Argy wheat coming in at around USD220-221/tonne FOB - the equivalent of less than the price of UK feed wheat at the moment.

This is the first time Egypt has bought wheat from outside the Black Sea region this season. France yesterday forecast that it's sales to the world's largest wheat buyer would slump 92% in 2011/12.

The USDA are out with revised world and US production and stocks data on Friday, increases in both are what the market is anticipating.