30/12/11 -- EU wheat finished mixed but mostly higher on the last trading day of the year with Jan 12 London wheat up GBP0.75/tonne to GBP152.25/tonne and Jan 12 Paris wheat falling EUR0.75/tonne to EUR202.50/tonne.

Despite the recent mini-rally London wheat finished 2011 GBP46.75/tonne, or 23.5%, lower than it began it. The closing high for the year was GBP217.50/tonne set in April and the closing low was GBP141.00/tonne set earlier this month.

Paris wheat put in a slightly better performance, aided by the weak euro. It closed 2011 EUR50.00/tonne, or 19.8%, lower than it was twelve months previously. The high of the year was EUR278.50/tonne established in February and the low EUR178.50/tonne set on the last day of November.

Both performances were worse than US wheat which "only" fell by 18% in Chicago, Kansas wheat declined by 15% and Minneapolis wheat by just 2.6%.

To offer some crumb of comfort this was the highest front month close for London wheat in two months, with Paris wheat ending just below yesterday's more than three month high.

As we approach the new year there are still plenty of conflicting balls in the air to decide market direction in 2012.

On the bear side we have world wheat stocks running at their highest levels in more than a decade, and within 2 MMT of their highest in history. We also have the albatross that is the European debt crisis and signs of a slowdown in Chinese growth.

For the bulls there's drought in South America and rising tensions in the Middle East as Iran threatens to close the Strait of Hormuz which carried more than a third of all seaborne crude oil this year.

We also have the not insignificant matter of around 2.5 million of Ukraine's 8 million hectares of winter grains needing replanting in the spring and an unusual winter drought developing in the Dakotas, Minnesota, Iowa and northeast Nebraska.

There are a few unknown factors to consider too like whether fund money will decide to get back into grains in 2012.

Four months ago non-commercial funds had a net long position of over 270,000 Chicago corn contracts. Last week's Commitment of Traders report showed those same funds are now long less than 45,000 contracts.

It's never easy this game is it? Best wishes to all for a healthy, happy and prosperous 2012.

29/12/11 -- EU grains ended with Jan 12 London wheat up GBP0.50/tonne to GBP151.50/tonne and Jan 12 Paris wheat EUR2.75/tonne higher at EUR203.25/tonne.

London wheat has now put on GBP10.50/tonne, or 7.4%, since the lowest close of the year set on December 10th. Paris wheat has gained EUR24.00/tonne, or 13.4%, in the same three week period.

European wheat is faring better much than it's UK counterpart partly due to the continued weakness of the euro, which fell to a more than 15 month low versus the dollar today after a disappointing Italian bond auction.

Italy raised a total of EUR7.5 billion in four auctions today, less than the EUR8.5 billion on offer and had to pay almost 7% on EUR2.5 billion of ten-year bonds. That's lower than last month but still close to unsustainable levels.

The ailing Mediterranean nation needs to refinance EUR330 billion worth of debt in 2012 alone, that's the equivalent of almost EUR6.5 billion each and every week next year. What could possibly go wrong?!

The weak euro should however help European wheat stay competitive on the export stage. Even so, the lion's share of yesterday's 250,000 to 300,000 MT optional origin wheat purchase by Algeria is expected to come from South America rather than it's normal favourite supplier - France.

Argentina has been making a bit of a name for itself as the world's cheapest supplier of wheat recently and it's expected that most if not all of yesterday's wheat may end up coming from there.

The markets remain in thin holiday mode, so it may be dangerous to conclude that we've finally broken out of the downwards trend that's been in existence now since April.

European leaders have been "on holiday" for much of this recent mini-rally, let's see what happens when the bickering resumes again in 2012.

28/12/11 -- EU grains extended their recent rally with Jan 12 London wheat climbing GBP4.00/tonne to GBP151.00/tonne, Jan 12 Paris wheat rising EUR3.50/tonne to EUR200.50/tonne.

It was a largely hot and dry Christmas in Brazil and Argentina that propelled London wheat to the best close in almost eight weeks and Jan 12 Paris wheat to the highest close since September.

London wheat was playing catch-up after Chicago wheat was around 20-22 cents firmer last night and Paris wheat closed EUR2.00/tonne higher.

Whilst coming too late to damage wheat production the recent heat wave and dry spell are seen potentially trimming corn and soybean output in South America.

Local analysts there such as Michael Cordonnier now peg corn production in Brazil at 60 MMT and in Argentina at 27 MMT, whilst these estimates are lower than the USDA currently say (by 1 MMT and 2 MMT respectively) they are still both all time highs.

Elsewhere Russia’s Ag Ministry pegged the 2011 grain crop at 93.8 MMT in clean weight, a 54% increase on 2010, reiterating the potential to export 25 MMT in 2011/12.

23/12/11 -- EU grains ended a holiday-shortened session with Jan 12 London wheat up GBP1.25/tonne to GBP147.00/tonne and Jan 12 Paris wheat down EUR0.25/tonne to EUR195.00/tonne.

For the week as a whole London wheat gained GBP5.00/tonne and Paris wheat EUR11.50/tonne. It was a predictably low volume day with very little of note to report.

So as we near the end of what has been another volatile year in which London wheat has fallen over a quarter since the end of 2010, and by almost a third from the highs of the year set in April, I thought that a quick flick back through the record books might be of interest.

Despite the temptation to kick the cat because the price of wheat doesn't begin with a two any more, it is worth considering that it's only ever been higher than today's close on Christmas Eve twice before, according to my records which go back to 1984.

Those years were of course last year when it closed at GBP197.50/tonne and in 2007 when it was GBP166.25/tonne on the day before Christmas.

Once we get into 2012 the immediate market direction may depend on the longevity of the South American weather story versus the inevitable market refocus on the European debt issues.

Best wishes for Christmas to you all.

22/12/11 -- EU grains ended with Jan 12 London wheat up GBP1.25/tonne to GBP145.75/tonne and Jan 12 Paris wheat EUR1.50/tonne higher at EUR195.25/tonne.

Defra issued it's final estimate of the 2011 UK wheat harvest which came in at 15.3MMT, an increase of 2.5% on 2010.

The highest domestic yields came in at 8.1 MT/ha from the North East and Yorkshire and the Humber. The lowest were 6.5 MT/ha from the North West and Merseyside. The Eastern region was the only one to see a decreased yield between 2010 and 2011, they added.

Barley production was pegged at 5.5 MMT, up 4.8% on last year and OSR output was said to be a record 2.8 MMT, a whopping 24% increase on 2010.

"On a regional basis, the highest yields for barley were in Yorkshire and the Humber with an average of 6.3 MT/ha. The lowest yield of 4.4 MT/ha was in the Eastern region, highlighting that the spring drought has had more of an impact on this region. Dry soils in the East of England earlier in the year led to poor tillering and delayed nitrogen uptake resulting in lower barley yields as barley has less ability to compensate for reduced tiller numbers later on in the season," they said.

"In England OSR production increased from 2.1 million tonnes in 2010 to 2.6 million tonnes in 2011. Winter sown production increased by 24% and spring sown increased by 35%. Winter oilseed crops established well in autumn 2010 and disease control continues to improve. Prices have also proved attractive for growers with an increased demand for biodiesel. Early indications from autumn 2011 plantings indicate this upward trend in oilseed production is set to continue," they added.

21/12/11 -- EU grains ended mixed with Jan 12 London wheat down GBP1.30/tonne to GBP144.50/tonne and Jan 12 Paris wheat up EUR2.50/tonne to EUR193.75/tonne.

The pound climbed to its highest since January against a lethargic euro, closing above 1.20 on the day.

Fresh news was fairly limited, new crop London wheat gained on old crop with the differential between July and Nov narrowing to GBP6.00/tonne at the close.

More than one compounder I've spoken to in recent weeks questions why the 2011 harvest should command any sort of a premium over next year's harvest at all.

The market remains concerned over "drought" in South America, although other than that there are few bullish stories around.

Nov/Dec rains in the major HRW wheat areas of Kansas, Oklahoma and Texas have been 200-300% above normal, according to Martell Crop Projections. That should be highly beneficial for American winter wheat.

20/12/11 -- EU grains ended mixed with Jan 12 London wheat down GBP0.20/tonne to GBP145.80/tonne, Jan 12 Paris wheat rising EUR2.75/tonne to EUR191.75/tonne.

London wheat was higher early in the day but slid into negative territory late on as the pound rose close to 1.20 versus the weak euro. For Paris wheat this was the highest close for a front month in six weeks.

UK merchants report that farmer selling interest has increased as ex farm levels have risen back into the GBP140.00/tonne plus range for the new year.

As well as expecting a record wheat crop this year Australia is in for an all time high OSR harvest too. The Australian Oilseed Federation is estimating output at a record 2.95 MMT, up 37% on last year.

India is also set to establish a record of it's own, bringing in a wheat crop in early 2012 in excess of this year's all-time high 85.93 MMT, according to the Farm Secretary there.

Russia is also re-writing the record books, having just harvested new highs for rapeseed (1.1 MMT), soybeans (1.5 MMT) and sunflower seed (8 MMT). Whilst it's bumper grain harvest of 92 MMT isn't am all-time high it is up more than 50% on last year.

Neighbouring Kazakhstan has a record wheat crop of it's own to market, whilst Ukraine has an all-time high grain harvest led by corn production that is up 75% on last year.

Meanwhile the US is expected to plant a post-war record area of corn in 2012.

It seems therefore that maybe this mini rally in grains is more to do with year-end profit-taking and book squaring than anything else. Only time will tell.

19/12/11 -- EU grains ended with decent gains for once with Jan 12 London wheat up GBP4.00/tonne to GBP146.00/tonne and Jan 12 Paris wheat EUR5.00/tonne higher at EUR188.50/tonne.

For both London and Paris wheat this was the highest close for a front month in just over a month. For London it was the biggest one day gain since July.

The catalyst for today's rally seems to be a combination of a developing dryness in South America storyline, plus a reversal from oversold conditions and year-end book squaring/profit-taking.

Whether this is a major change of direction remains to be seen. Nothing has changed on the European debt front which has been the main thing driving the market down from the highs set in April/May.

Things don't look too rosy for wheat production in Ukraine for 2012 and there's a question mark hanging over Argentina's ongoing wheat harvest.

"Wheat near Bahia Blanca received only 57% of normal rainfall in August through to November based on official weather reports. This was a key period in crop development, winter to spring, when southern Argentina wheat was tillering and jointing. Heavy rainfall finally developed in November, replenishing field moisture in Buenos Aires, but It was too late for wheat to recover," say Martell Crop Projections.

"Late in the growth cycle, heavy rainfall boosted grain-filling in wheat, but poor germination previously had reduced plant populations. In addition, growth was stunted from prolonged drought. Poor vegetation in early November confirmed wheat damage in southern Buenos Aires, the main area where wheat is intensively cultivated," they add.

In contrast however Australia is expecting it's second record crop in a row and increased production is also on the cards from Europe in 2012 if the weather plays ball.

To get things into perspective Argentina's wheat crop is less than half that of Australia's and Ukraine's is only a seventh of Europe's.

16/12/11 -- EU grains ended mixed with Jan 12 London wheat down GBP1.00/tonne to GBP142.00/tonne, Mar 12 unchanged at GBP142.05/tonne and May 12 up GBP0.30/tonne to GBP144.00/tonne. Jan 12 Paris wheat was up EUR1.75/tonne to EUR183.50/tonne.

On the week as a whole Jan 12 London wheat was GBP0.25/tonne lower. Jan 12 Paris wheat managed to do a bit better, posting a gain of EUR4.00/tonne. Prices the other side of the Channel got support this week from the ailing euro against which the pound rose to its best levels since February.

At the risk of repeating myself we remain stuck in a very narrow range. This was the twentieth session in a row that London wheat has closed within the GBP140-145.00/tonne band.

The problems in Europe continue to hang over the market. Ratings agency Fitch downgraded six of the world's largest banks and are now switching their attention to entire countries, revising its outlook on France to "negative" from "stable". They added that downgrades were also being considered for Belgium, Spain, Italy and Ireland amongst others.

Harvesting in the southern hemisphere is ongoing. The Buenos Aries Grain Exchange estimate the Argentine wheat crop at 13.6 MMT, up from 13.0 MMT previously. Private estimates suggest that Australia's crop could top 29 MMT, beating last year's record output.

As we head into the depths of winter early indications are that the EU-27 2012 wheat crop will be around 3-4% higher than in 2011 by virtue of better yields in the west.

Russian wheat is said to be in decent condition overall, but much of Ukraine's crop will need replanting in the spring. That may see a further switch into corn production there for 2012.

Informa Economics now peg US winter wheat plantings at 39.833 million acres, down 813,000 acres from last year. Spring wheat plantings are however expected to at least partially offset some of this reduction. Corn sowings there this spring are now seen at 94.389 million, a post-war record.

Russian wheat exports have slowed up a little from their early season phenomenal pace, whilst Ukraine has concentrated its efforts more on shifting it's record corn crop. Kazakhstan is left stuck with it's own record wheat harvest waiting for some spare capacity to become available at ports on the Black Sea.

15/12/11 -- EU grains ended mostly higher with Jan 12 London wheat up GBP1.25/tonne to GBP143.00/tonne, Jan 12 Paris wheat rising EUR1.00/tonne to EUR181.75/tonne.

Wheat opened lower following last night's stumble in Chicago, but managed to claw back into mostly positive territory by the end of the day, even if only marginally.

Farmers don't want to sell at these levels. Buyers are relaxed about buying, pointing to the fact that prices have fallen around a third in the past 7-8 months, so why should they be in a hurry? So we remain stuck in a tight narrow range.

Strategie Grains are predicting a rebound in EU-27 wheat production for 2012 with a crop here of 142.4 MMT, a 3.6% increase on this year. They are forecasting a total EU-27 grain crop of 290 MMT, some 5 MMT up on 2011.

Wheat production will rise in western Europe in 2012, where crops in France, Germany and the UK were adversely affected by drought in the spring and early summer of this year, they forecast.

EU-27 barley production will rise 2.4 MMT to 54.5 MMT, whilst corn output will fall by a similar amount to 62.2 MMT, they add.

The EU issued 252 TMT of soft wheat export licences for the week to Dec 13th, whilst that is up on last week's very poor showing it's still pretty modest. That takes the year-to-date total to 6.9 MMT, 35% down on last year. Cumulative wheat imports of 2.8 MMT meanwhile are 130% up on year ago levels.

Ukraine confirmed a record 2011 clean weight grain crop of 56.4 MMT, of which 22.4 MMT is wheat (up 33% on last year) and 22.3 MMT is corn (+87%). They will be very aggressive marketeers of corn in particular in 2011/12 as this is easily the largest crop they've ever had and domestic consumption is less than 8 MMT.

Russian analysts SovEcon upped their estimate of 2011 grain production there by 2 MMT to 92 MMT, increasing their wheat crop number by 1 MMT to 56.5 MMT - a 36% rise on last year.

14/12/11 -- EU grains ended mixed, but mostly slightly lower with Jan 12 London wheat down GBP0.25/tonne to GBP141.75/tonne and Jan 12 Paris wheat unchanged at EUR180.75/tonne.

London wheat seems stuck in the GBP140-145 range where it has now been for the past nineteen trading sessions. Paris wheat is similarly range bound between EUR178-183, supported by the weak euro.

Strategie Grains released their first estimates for UK grains production for 2012, noting that the unusually mild autumn weather has led to a rapid development of young crops.

Wheat plantings are seen little changed from last year at 1.98 million hectares, with a small increase in the winter barley area matched by a small reduction in anticipated spring barley sowings.

A return to trendline yields should see the UK wheat crop increase from 15.4 MMT to 15.7 MMT, with the total barley crop estimated at 5.7 MMT from 5.6 MMT in 2011. Both estimates constitute an increase of around 2% on 2011.

Wheat yields are seen rising from 7.8 MT/ha to 7.94 MT/ha, with winter barley yields up from 6.2 MT/ha to 6.49 MT/ha.

13/12/11 -- EU grains finished mostly higher with Jan 12 London wheat up GBP1.00/tonne to GBP142.00/tonne and Jan 12 Paris wheat firming EUR1.50/tonne to EUR180.75/tonne. Both remain stuck in a very narrow range.

Concerns over European debt look set to hang over the market for some considerable time yet, capping potential gains. Yields on Spanish and Italian ten-year bonds were both on the rise again today and the pound rose to a ten-month high above 1.1875 against the euro.

The big news of the day was probably French wheat gaining a first success of the 2011/12 marketing year in the latest Egyptian wheat tender. The country's state buyer GASC bought 180,000 MT of wheat split three ways between Russia, Argentina and France.

The winning French wheat bid was priced at USD240.50/tonne, down USD4.00/tonne on last week's best offer, which actually came in cheaper on an FOB basis than the Russian wheat which was priced around USD3.50/tonne dearer. Russia does however have a freight advantage over France on wheat shipments to Egypt. The Argentine wheat proved once again to be the cheapest in the world at USD226.00/tonne.

Russian and Argentine wheat also won a 110,000 MT tender by Yemen.

At home, the latest figures from HM Customs & Excise show that the UK exported 291,500 MT of wheat in October, bringing the marketing year-to-date total to just over 850,500 MT, almost 30% down on this time last season.

The Dutch were the biggest buyers, taking 118,000 MT, with Spain our next biggest home with 75,000 MT.

Barley exports stand at 251,600MT in the first four months of the season, around 10% down on 2010/11. In contrast rapeseed shipments have more than doubled to 226,800 MT.

12/12/11 -- EU grains ended mostly lower with Jan 12 London wheat down GBP1.25/tonne to GBP141.00/tonne, Jan 12 Paris wheat down EUR0.25/tonne to EUR179.25/tonne.

EU wheat continues to work its way gradually lower as traders try to work out the consequences of the news coming out of Europe in the aftermath to Friday's conclusion to the leaders summit.

The market seems to think that the "deal" thrashed out maybe doesn't do enough to help immediate solvency problems, with the euro declining to its lowest levels against the pound since February.

In addition to the news emanating from Brussels on Friday we also had a raft of bearish data from the USDA to digest, including record world wheat production and ending stocks up 6 MMT from last month to the highest levels in more than a decade.

Faced with such a deluge of bearish information wheat actually put up quite a resilient performance today, sufficient to get some traders speculating that maybe the market is trying to form a bottom here.

Australian growers continue to battle against harvest rains which threaten to make more of their crop only suitable for feed grade with each passing day. That may be slightly supportive for milling wheat.

Dryness in eastern Argentina and southern Brazil is a possible threat to corn production there, although it's early days yet. Some are talking of a building La Nina to bringing summer heat and dryness to the region.

Jordan are tendering for 100,000 MT each of wheat and barley with the results due next week.

Ukraine's grain export pace is accelerating, as they shipped out almost 400,000 MT in the first week of the month, bringing the marketing year to date total to 7.3 MMT, a third up on this time last year.

09/12/11 -- EU grains ended mostly lower with Jan 12 London wheat down GBP1.25/tonne to GBP142.25/tonne and Jan 12 Paris wheat falling EUR0.25/tonne to EUR179.50/tonne.

Once again there wasn't actually a great deal of movement on the week as a whole with London wheat finishing just GBP0.90/tonne lower and Paris wheat down EUR1.75/tonne.

It remains to be seen what the full repercussions are for the future of the EU-27 as we know it, and the UK's part within it, after David Cameron's surprise European treaty veto.

EU and US wheat continue to miss out in a series of high profile wheat tenders, with Brussels granting just 142,000 MT of soft wheat export licences this week. That's the second lowest weekly total of the season so far.

The USDA were out with a raft of data, raising the world wheat production estimate by 5.7 MMT to an all-time high of 689 MMT. That came mostly by virtue of increases of around 1 MMT each for China and Canada, 1.5 MMT for Argentina and 2.3 MMT for Australia.

They left EU-27 wheat production unchanged at 137.5 MMT, with Russian and Kazakh output also left the same as last month at 56 MMT and 21 MMT respectively. It should be noted that they are probably too low on the former and almost certainly too low on the latter. The FAO earlier this week pegged Russian output at 58 MMT and Kazakh production at 24 MMT.

World corn production was also seen 8.5 MMT higher at 867.5 MMT, with the EU-27 accounting for 1 MMT of that increase with a crop here of almost 64 MMT - the second highest on record.

On the international trade front the USDA acknowledged that US wheat exports would not reach their previous target of 26 MMT, revising that aim down to 24.5 MMT.

They left EU-27 wheat exports unchanged at 17 MMT, although we will need to speed up a little from the current rate to reach that goal - we've only exported 6.6 MMT so far and we're almost at the halfway point of 2011/12.

Australia is now seen emerging as the second largest wheat exporter in the world, breaching the 20 MMT mark for the first time in it's history shipping out 21.5 MMT in 2011/12 to get within 3 MMT of America as the world's largest wheat supplier.

World wheat ending stocks were hiked almost 6 MMT to 208.5 MMT, the highest this century and within 2 MMT of the largest in history.

The USDA data all looks rather bearish, especially when taken within context of the European debt problems. Under the circumstances wheat performed rather well to only end with nominal losses on the week. Will we get a delayed reaction to these numbers next week?

08/12/11 -- EU grains finished mostly lower with Jan 12 London wheat down GBP1.40/tonne to GBP143.50/tonne and Jan 12 Paris wheat falling EUR0.25/tonne to EUR179.75/tonne.

The market didn't know what to do for the best ahead of a potentially very big day tomorrow. The BoE left interest rates and QE here on hold as anticipated.

The ECB lowered interest rates in the eurozone by a quarter to 1% in a move that was also widely expected. New chief "super" Mario Draghi said that the chance of a eurozone break-up was "quite far-fetched at this stage" - does that suggest that there may be a stage at which it won't be?

He also played down suggestions that the ECB was about to expand its bond purchasing programme, which kept the markets on edge ahead of tomorrow's conclusion to the two day summit in Brussels of EU leaders.

Also tomorrow we have the December WASDE report from the USDA. As a taster for what might come the FAO today pegged the world wheat crop this year at a record 694.8 MMT, 6.5% up on 2010, 10 MMT above the previous record set in 2009 and 11.5 MMT more than the USDA said in November.

In amongst that was an EU-27 wheat crop estimate of 139.2 MMT, up 2.4 MMT on last year and 1.7 MMT higher than the USDA currently estimate. There were also bigger numbers for both Russian and Kazakh wheat production than the USDA currently has factored in, by 2 MMT and 3 MMT respectively.

In other news the French Ministry pegged the soft wheat planted area there up 1% to 5.06 million hectares, the highest since 2008. The total winter grain area is forecast up 1.3% to 7.036 million hectares.

Iraq announced that US and EU origins had missed out after it bought 400,000 MT of Russian, Australian and Canadian wheat in a tender.

07/12/11 -- EU grains ended mixed with Jan 12 London wheat up GBP1.90/tonne to GBP144.90/tonne, Jan 12 Paris wheat was EUR0.25/tonne higher to EUR180.00/tonne.

Some London wheat months were slightly lower as were many Paris positions. Exactly why front month Jan 12 London wheat managed to post enough gains to make it a GBP0.85/tonne premium to further forward March is difficult to explain.

It was a low volume day as the market sits and waits, or more like hopes, for some direction to come on Friday. They may be disappointed if the comments of one German official are to go by, he said that more time may be needed to finalise plans to save the eurozone than Friday's self-imposed deadline affords.

The pound rose above 1.17 against the euro to close to its highest levels since February.

Also on Friday we have the latest missive from the USDA detailing world production and stocks numbers. Trade opinion is that they will raise slightly their estimate for world wheat ending stocks for the 2011/12 season from what they already say is the highest level in a decade.

Tomorrow we will get the figures on the latest weekly EU export licences and also the numbers on USDA weekly export sales and shipments. The latter will be particularly of interest for wheat as shipments have slumped quite alarmingly of late.

US corn sales are also on the decline. If domestic demand over there also falls away sharply once the ethanol blenders' tax credit gets removed in a couple of weeks then things could get interesting.

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.

05/12/11 -- EU grains finished mostly lower with Jan 12 London wheat down GBP0.15/tonne to GBP143.00/tonne and Jan 12 Paris wheat falling EUR1.50/tonne to EUR179.75/tonne.

All eyes are on Europe this week, as Merkel and Sarkozy meet in Paris today ahead of an EU summit on Friday. Following today's meeting the two main protagonists issued a joint statement saying that treaty changes to prevent a repetition of the Eurozone crisis "should" be in place by March.

Ideally, they'd like all EU-27 members to vote these changes through.

At the very least though those changes, which include outside checks on budget deficits and sanctions against those that breech them, will need to be ratified by all 17 member states that use the euro. How easy (and how long) to obtain that will prove to be is anybody's guess.

Meanwhile these alterations don't appear to contain anything to address the current debt problems.

Whilst all this is going on the grain markets are left in limbo, trading in a narrow range.

France Export Cereales say that the country is unlikely to export more than 200,000 MT of wheat to Egypt in the current marketing year - just 8% of what they sold the world's leading wheat buyer in 2010/11.

Vietnam is said to be buying Australian feed wheat at USD255/tonne including freight, around USD20-25/tonne cheaper than it was a month ago, from a nation awash with low grade wheat for the second year in a row.

Japan is buying Argentine corn and sorghum as Asian buyers turn away from more expensive US corn.

Ukraine's Ag Ministry has lowered it grain export forecast for the current season from 26-27 MMT to 23-24 MMT. Corn will constitute around half of that, according to the USDA. Some private analysts peg corn's share of the export market significantly higher than that.

02/12/11 -- EU grains ended mostly higher walthough Jan 12 London wheat was down GBP0.90/tonne to GBP143.15/tonne, Jan 12 Paris wheat was EUR2.00/tonne higher to EUR181.25/tonne.

There wasn't much change on the week as a whole with Jan 12 London wheat up GBP0.90/tonne and Jan 12 Paris wheat up a marginal EUR0.25/tonne.

The market seems to be treading water looking for direction, the week ahead may provide some with EU leaders supposedly set to put some flesh on the bones of their promised plan to save the world by December 9th. Ahead of that Merkel and Sarkozy meet on Monday.

Whilst this week's coordinated central bank action may improve liquidity it won't do anything to help solvency, and that is what this crisis is really all about.

There are some concerns starting to form over crop prospects in Ukraine, where dryness means that almost a quarter of autumn-planted grains still haven't emerged. "Ukraine rainfall has been less than 40% of normal in the 90 days ending mid November," according to Martell Crop Projections.

In contrast, analysts in Russia are indicating the potential for a bumper 100 MMT grain crop in 2012, which would be the second highest harvest in the post-Soviet era.

China's National Bureau of Statistics says that this season's corn harvest there is a huge 191.75 MMT, far higher than other estimates in the market (the USDA say 185.4 MMT). Their activity, or otherwise, on imports over the coming months will perhaps offer a few clues as to how accurate that number is likely to be.

01/12/11 -- EU grains ended mixed although wheat was mostly higher as Jan 12 London wheat finished up GBP1.40/tonne at GBP144.05/tonne and Jan 12 Paris wheat ended EUR0.75/tonne higher at EUR179.25/tonne.

New crop Paris wheat was a little lower, as too were most months on corn, rapeseed and malting barley.

The European debt crisis remains the key driver. Support today came from news of Spain and France auctioning off debt at better levels than last week. We are still probably only one or two pieces of proper bad news away from a full blown Armageddon.

Ukraine says that it has brought in a record clean weight 54.5 MMT grain harvest this year. Foreign sales are increasing, with November exports at 2.2 MMT - the highest of the marketing year so far.

Russia is already turning its attention to 2012. Influential analysts SovEcon are prediction a winter wheat crop of 39.5 MMT, a 14% increase on 2011. They also increased their forecast for 2011/12 grain exports by 2 MMT to 24.5 MMT.

IKAR say that Russia has exported a record 14.1 MMT of grains in the Jul 1st - Nov 20th period, of which 12 MMT was wheat.

At home, the HGCA say that despite "unseasonably mild weather and below average rainfall in many regions" this autumn, crops are largely in good condition heading into winter.

"Early drilled crops of winter wheat are now well established with lush growth," they add.

US wheat shipments continue to lag. Based on the mean of exports over the last 8 weeks the US will ship 23.3 MMT of wheat in 2011/12 - well below the 26 MMT currently forecast by the USDA.