Untitled Document
03/09/10
-- November London wheat closed GBP4.50 higher at GBP160.50; November Paris
wheat rose EUR2.50 to EUR232.00; November Paris corn was up EUR2.00 to EUR197.50;
November Paris rape ended 3.00 higher at EUR378.25; November Paris malting barley
closed down EUR0.50 at EUR229.00.
Open interest in November Paris wheat declined by around 6,000 contracts during
the course of the week, but still remains incredibly high at over 135,000 lots.
Also striking is the fact that November 2010 closed Friday at a EUR7 premium
over March 2011.
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The German Ag Ministry pegged wheat production there at at 23.92
MMT, whilst German analysts FO Licht said 23.3 MMT, compared to last season's
25.2 MMT. Quality is a serious issue after a month of almost non-stop rain.
The German Ministry
tried to allay fears that they may need to import up to a million tonnes of
hard wheat themselves this season due to crop damage, but the trade remains
unconvinced after a German miller bought 20,000 MT of US hard wheat earlier
in the week.
Meanwhile French exports continue at a strong pace, with some
trade talk of them being sold out by early in the new year at current rates.
Brussels issued export licences for 850,000 MT of EU soft wheat
this wee, the highest weekly total so far in the 2010/11 marketing year that
began on July 1st.
The trade is also attempting to analyse the implications of
Russia saying this week that their export ban will hold until "next harvest",
and exactly what they mean by that. The start of the harvest, the end of it,
the wheat harvest, or the entire grain harvest?
The USDA are out next Friday with their latest world supply
and demand numbers which will be scrutinised in detail.
US wheat closed
sharply higher Friday night, that is likely to carry through to a stronger opening
again for EU futures on Monday. America is closed Monday for Labour Day, so
expect further increased volatility Tuesday.