EU Grains Close

Phew, what a day! Nov London wheat closed GBP9.15 higher at GBP131.15/tonne; Nov Paris wheat ended up EUR10.25 at EUR176.75/tonne; Nov Paris corn was up EU8.50 at EUR172.75/tonne; Nov Paris rapeseed closed EUR11 higher at EUR370.75/tonne; Nov Paris malting barley rose EUR8.25 at EUR188.50/tonne.

Nov London wheat hit it's best levels since June 2009, the Paris grains all set fresh contract highs.

Crop production estimates are dropping like flies, with lower output estimates from Russia, Kazakhstan, Ukraine and Hungary all entering the market in the past few days.

French analysts Strategie Grains lowered their EU-27 production estimates across the board today too, lopping 3.6 MMT off their soft wheat forecast and 1.5 MMT from it's barley figure. Durum wheat and corn estimates were also lowered.

"The end of the growth cycle in Europe coincided with a spell of excessive heat in west Europe and excessive rain in east Europe, causing large reductions to estimated production in both parts of the EU," they said.

Europe had been the only major exporter predicting a larger wheat crop this summer, but output here now is seen as being lower than in 2009, despite a significant increase in planted area.

The falling freight market and weak euro is seen levelling the playing field for EU grains, helping them make inroads into destinations that would normally be out of bounds. The first barley cargo bound for China sailed from the French port of Rouen last week, according to media reports.