David Sheppard, managing director of Gleadell grains, provides a recap of this week in the wheat market.

This week has been governed by actions surrounding the current Euro-land debt crisis. Uncertainty about the debt crisis has weighed on commodities recently due to concerns about the risk for a slowing global economy. The ‘rescue’ plan announced today, with banks holding Greek debts having largely accepted 50% losses and the EFSF - which effectively funds the EU bailout- having its fund increased by up to €1 trillion, has allowed the € to gain against most currencies. In addition, the equity and commodity markets have also firmed with US markets supported by the weaker US$.

Current fundamentals still point to aggressive sellers of Black Sea wheat, with Russian and Ukrainian wheat offered at considerable discounts to European supplies. The potential for dramatic change in the current pricing structure in the short/medium term looks unlikely, leaving the EU export outlook bleak. 

Wheat news:

• Ukrainian President signs law cancelling export duties that expired 22^nd October.
• Kazakhstan new-crop grain exports could reach 15mln/t following record post-Soviet harvest.
• Ukraine sees higher 2011 grain crop with officials placing export potential at 27mln/t.
• Egypt purchases 120,000t of Russian wheat for January 1-10 shipment – cheapest French wheat offered is $26/t higher.
• EU exports could slow in coming weeks due to stiffening competition from Black Sea producers.
• USDA reports increased US and Global wheat/corn stocks – global wheat stocks at 10-year high.
• Egypt announces GASC will include wheat of Ukrainian origin at future tenders.
• Ukraine cuts winter area for the 2012 crop due to lack of significant rainfall.
• Ukrainian 2012 plantings reported at 93% completed, 71% in good/satisfactory condition.
• Argentina sees 2011-12 wheat crop at 12.6mln/t, down from 15.3mln/t a year earlier.
• China purchases 500,000 tonnes of Australian wheat, taking advantage of a decline in global grain prices.