29/06/12 -- EU grains closed mixed with Jul 12 London wheat down GBP1.50/tonne to GBP188.00/tonne and Nov 12 GBP0.50/tonne higher at GBP171.00/tonne. Aug 12 Paris wheat closed EUR0.75/tonne lower at EUR229.00/tonne, whilst Nov 12 was EUR2.50/tonne easier at EUR226.75/tonne.

The euro was firmer following news that a deal of sorts had been thrashed out between EU leaders at last night's summit, that contributed to weakness in Paris grains today.

For the week overall Jul 12 London wheat still gained GBP5.00/tonne despite today's losses and Nov 12 added GBP9.45/tonne. Aug 12 Paris wheat was up EUR14.75/tonne on the week and Nov 12 gained EUR10.25/tonne.

The much awaited USDA report was neutral to slightly friendly for wheat, pegging the US spring wheat area some 600,000 acres below trade expectations. US Jun 1st stocks were however towards the top end of trade estimates at 743 million bushels.

US corn plantings came in above trade forecasts at 96.4 million acres, half a million higher than predicted in March and a hefty 4.5 million up on 2011. Soybean plantings were also increased by 0.5 million acres more than anticipated at 76.0 million acres, some 1.1 million up on last year.

Attention very quickly turned back to US weather however, and after a very brief dip that lasted no more than ten minutes after the news came out, the market was back up to where it had been before the announcement.

The trade will now start to focus on the USDA's yield estimates, revised versions of which will be issued on July 11th.

Outside markets surged on optimism on Europe, with crude oil gaining more than USD4.00/barrel and stock markets also posting strong gains. How long the euphoria lives remains to be seen, recent similar rallies have evaporated within a day or two once traders pick through the details (if there are any) of previous stimulus packages.

In Europe Coceral cut their EU-27 soft wheat production estimate by around 1 MMT due to losses in eastern member states. However output amongst the three main protagonists was increased following beneficial spring rains. France's crop was upgraded to 35.15 MMT, with Germany's now seen at 22.71 MMT and the UK's raised to 15.73 MMT.

At home the HGCA said for wheat that: "Overall yield potential remains good but the weather in the next next 4 weeks will be critical as crops move into the important grain fill phase."

Winter barley they said is "midway through grain fill with the earliest crops starting to ripen, but development has been slowed by the cool June temperatures, so harvest may be slightly later than normal." Yield potential was still "good" they added.

"Winter oilseed rape crops are typically at green seed stage and will soon move into the ripening phase. Crop development is behind recent years and this is& likely to lead to a later start to harvest. Lodging is the biggest issue at the moment with around 50% of the crop area affected to some degree which will affect ripening and potentially increase harvest losses," they concluded.

28/06/12 -- EU grains closed generally flat with Jul 12 and Nov 12 London wheat both unchanged, along with Aug 12 and Nov 12 Paris wheat.

Prices still hover around 12-month highs on surging US markets concerned about yield losses in corn and soybeans due to heat and dryness. Traders are also a little nervous however ahead of tomorrow's important USDA planting and stocks data.

Latest weather forecasts for the Midwest this afternoon appear to be factoring in more rainfall in the coming 5-day period. However most recent forecasts have failed to deliver promised precipitation.

Today and tomorrow's EU leaders summit is also a cause for nervousness, with few expecting too much in the way of serious and tangible progress to be made.

It seems to be shaping up that the Black Sea countries won't have the same volume of wheat to export in 2012/13, which may stop prices falling out of bed once the harvest gets going in earnest.

Harvesting is already underway around 10 days earlier than normal in the south of Russia, where yields are so far disappointing. Local analysts IKAR today cut their grain harvest estimate from 88.4 MMT to 84.5 MMT, with the wheat harvest coming in at 48.5 MMT compared to 56.2 MMT last year. Grain exports will total 17.5 MMT, compared to an estimated 27 MMT in 2011/12, they added.

Brussels only issued 21,000 MT of soft wheat export licences this past week, a very poor total with just one week of the 2011/12 marketing year left to go.

On the rapeseed front the NFU said as far as the UK crop goes "Continuous rain since March, significantly above average. Crop looks good, although estimates are conservative until it is in the barn. Prospects are likely to improve on current estimates."

In France they say "the end of winter was harsh, with frost damage to eastern crops and particularly oilseed rape in the North East. Spring rain improved the dry conditions of winter crops. Areas are stable at 1.5m Ha, but production will fall to 5 MMT (400 TMT down), with yields at 3.15 MT/ha."

29/06/12 -- EU grains closed generally flat with Jul 12 and Nov 12 London wheat both unchanged, along with Aug 12 and Nov 12 Paris wheat.

Prices still hover around 12-month highs on surging US markets concerned about yield losses in corn and soybeans due to heat and dryness. Traders are also a little nervous however ahead of tomorrow's important USDA planting and stocks data.

Latest weather forecasts for the Midwest this afternoon appear to be factoring in more rainfall in the coming 5-day period. However most recent forecasts have failed to deliver promised precipitation.

Today and tomorrow's EU leaders summit is also a cause for nervousness, with few expecting too much in the way of serious and tangible progress to be made.

It seems to be shaping up that the Black Sea countries won't have the same volume of wheat to export in 2012/13, which may stop prices falling out of bed once the harvest gets going in earnest.

Harvesting is already underway around 10 days earlier than normal in the south of Russia, where yields are so far disappointing. Local analysts IKAR today cut their grain harvest estimate from 88.4 MMT to 84.5 MMT, with the wheat harvest coming in at 48.5 MMT compared to 56.2 MMT last year. Grain exports will total 17.5 MMT, compared to an estimated 27 MMT in 2011/12, they added.

Brussels only issued 21,000 MT of soft wheat export licences this past week, a very poor total with just one week of the 2011/12 marketing year left to go.

On the rapeseed front the NFU said as far as the UK crop goes "Continuous rain since March, significantly above average. Crop looks good, although estimates are conservative until it is in the barn. Prospects are likely to improve on current estimates."

In France they say "the end of winter was harsh, with frost damage to eastern crops and particularly oilseed rape in the North East. Spring rain improved the dry conditions of winter crops. Areas are stable at 1.5m Ha, but production will fall to 5 MMT (400 TMT down), with yields at 3.15 MT/ha."

27/06/12 -- EU grains finished mostly higher again although Jul 12 London wheat was GBP0.50/tonne lower at GBP189.50/tonne, new crop Nov 12 was GBP2.70/tonne higher to close at GBP170.50/tonne. Aug 12 Paris wheat rose EUR3.25/tonne to EUR229.75/tonne, whilst Nov 12 was also EUR3.25/tonne firmer at EUR229.25/tonne.

Nov 12 London wheat closed within GBP2.50/tonne of the lifetime contract high spurred on by weather concerns in America and the Black Sea.

Early grains harvesting is underway in southern Russia, with wheat yields reported to be around 30-40% lower than last year, although quality is good. Ukraine winter barley yields are also said to be disappointing.

Meanwhile triple digit temperatures in America, combined with a general lack of rainfall, are seeing crop ratings tumble and yield prospects diminish sharply.

StatsCanada pegged wheat plantings there slightly lower than expected at 23.81 million acres, although that is still 11% up on last year. Rapeseed sowings are seen at a record high 21.27 million acres, 13% higher than a year ago and above the 20.9 million that the trade expected.

The next set of important planting data out is from the USDA on Friday. They are expected to put the US all wheat area around a million acres higher than they said in March at 56.9 million acres. Corn plantings are only expected to show a modest increase by most, although one or two think that up to a million acres more there could also be on the cards.

27/06/12 -- EU grains finished mostly higher again although Jul 12 London wheat was GBP0.50/tonne lower at GBP189.50/tonne, new crop Nov 12 was GBP2.70/tonne higher to close at GBP170.50/tonne. Aug 12 Paris wheat rose EUR3.25/tonne to EUR229.75/tonne, whilst Nov 12 was also EUR3.25/tonne firmer at EUR229.25/tonne.

Nov 12 London wheat closed within GBP2.50/tonne of the lifetime contract high spurred on by weather concerns in America and the Black Sea.

Early grains harvesting is underway in southern Russia, with wheat yields reported to be around 30-40% lower than last year, although quality is good. Ukraine winter barley yields are also said to be disappointing.

Meanwhile triple digit temperatures in America, combined with a general lack of rainfall, is seeing crop ratings tumble and yield prospects diminish sharply.

StatsCanada pegged wheat plantings there slightly lower than expected at 23.81 million acres, although that is still 11% up on last year. Rapeseed sowings are seen at a record high 21.27 million acres, 13% higher than a year ago and above the 20.9 million that the trade expected.

The next set of important planting data out is from the USDA on Friday. They are expected to put the US all wheat area around a million acres higher than they said in March at 56.9 million acres. Corn plantings are only expected to show a modest increase by most, although one or two think that up to a million acres more there could also be on the cards.

26/06/12 -- EU grains closed mixed with Jul 12 London wheat up GBP2.00/tonne to GBP190.00/tonne and Nov 12 GBP0.20/tonne lower at GBP167.80/tonne. Aug 12 Paris wheat closed EUR6.50/tonne firmer at EUR226.50/tonne, whilst Nov 12 was EUR1.00/tonne higher at EUR226.00/tonne.

Jul 12 London wheat posted another fresh high in more than a year as old crop remains tight and new crop availability looks further away than was anticipated a month or two back. Open interest is pretty thin in the contract, but it's the longs who are holding the aces it would seem.

Hot and dry conditions in the US are the main market driver at the moment, although with the winter wheat harvest past halfway and spring wheat largely escaping the worst of the weather at 77% good/excellent last night this is much more of a corn and soybean problem than a wheat one. Nevertheless wheat is more than happy to go along for the ride.

The EU Commission research unit MARS say that EU-27 wheat yields will be very similar to last season and the 5-year average at 5.32 MT/ha, with gains this month in France, Germany and the UK balanced by losses in Spain.

In France "abundant rainfall and (a) temperature increase during May and June depict a promising scenario for winter and spring cereals," they say.

"Cereals in major regions of the UK keep a higher-than-normal green biomass despite the tough weather conditions they have been subject to. However, disease pressure is expected to be high, given the continued rainfall, with an additional uncertainty on how it will managed," they add.

They now estimate UK wheat yields to average 8.16 MT/ha this year, which would be the second highest on record, and with a planted area of just under 2 million ha would suggest a crop of around 16.2 MMT this year. That would be around 5.3% up on last year.

French wheat yields are seen increasing 8.4%, with German yields up by 4.2%.

UK barley yields are forecast 2.6% higher at 5.81 MT/ha, with French yields coming in 13.2% up on last year and German yields rising 6.1%.

UK rapeseed yields are pegged at 3.34 MT/ha, 14.5% down on last year's record 3.91 MT/ha. French yields are forecast down 3%, but German yields are seen rising almost 20% on last year's drought-ravaged crop.

25/06/12 -- EU grains closed sharply higher with Jul 12 London wheat up to GBP188050/tonne and Nov 12 London wheat rising GBP6.45/tonne to GBP168050/tonne. Aug 12 Paris wheat rose EUR5.75/tonne to EUR220.00/tonne and Nov 12 was up EUR8.50/tonne to EUR225.00/tonne.

These were more than 12-month highs for both Nov 12 London and Paris wheat as US weather across the weekend remained hot and dry. Forecasts for the week ahead offer more of the same with temperatures in the Midwest set to hit 100F.

"Corn silking and pollination is advancing in the earliest planted fields. This is a yield-sensitive period of crop development that demands .20 inch of moisture, per day, for successful kernel development. There is not enough ground moisture to supply increasing crop needs on the majority of Midwest farms," said Martell Crop Projections.

The USDA is expected to cut corn good/excellent crop condition ratings by around 3-5% this evening.

Chicago corn touched limit up (plus 40 cents) in afternoon trade, dragging wheat with it.

Adding fuel to the fire was Russia's Ag Ministry cutting their grain production estimate from 94 MMT to 85 MMT, a drop of almost 10% on last year due to winterkill and spring drought. Export potential will fall 26% to 20 MMT from 27 MMT this season, they added.

Similarly, Ukraine's national weather centre forecast the grain crop there at 43-44 MMT vs the Farm Ministry's estimate of 48-49 MMT and compared 54 MMT in 2011/12.

The market is extremely excited, and now almost universally bullish, by the news coming out of America (which is bullish for corn rather than wheat) and is backed up by reduced production estimates for Black Sea wheat.

For now, European debt concerns appear to have been placed on a very low simmer at the back of the hob. Almost a lone voice in the wilderness today was billionaire investor George Soros calling on Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by finance leaders at this week's EU summit to produce drastic, tangible and credible measures to stave off the debt crisis could spell the demise of both the eurozone and the euro.

22/06/12 -- EU grains finished higher with Jul 12 London wheat ending up GBP3.25/tonne to GBP183.00/tonne, and new crop Nov 12 ending GBP1.80/tonne higher to close at GBP161.55/tonne. Aug 12 Paris wheat was EUR2.25/tonne higher at EUR214.25/tonne, whilst Nov 12 was EUR2.25/tonne firmer at EUR216.50/tonne.

For the week, Jul 12 London wheat was up GBP8.00/tonne and Nov 12 gained GBP7.55/tonne. Aug 12 Paris wheat rose EUR11.25/tonne and Nov 12 EUR12.75/tonne.

At home, old crop is being supported by ideas that the harvest is likely to be 2-3 weeks behind normal following another week of widespread heavy rain. What we do have left from the 2011 harvest is therefore going to have to last a bit longer than expected.

Potential yields and bushel weights look very promising after the crop has enjoyed abundant moisture availability in the past couple of months. It's quality that is now the main concern.

Harvesting a large crop of high moisture wheat that needs to go through the dryer first to only wind up making feed grade is what everybody is worried about now.

Across the Channel French and German wheat has enjoyed plenty of recent moisture too, except they've also had their rainfall events interspersed with more sunshine than we have seen here in the UK.

Toepfer raised their forecast on German wheat production by more than 1.2 MMT today, from 21.49 MMT to 21.71 MMT, citing beneficial spring rains.

FranceAgriMer rate 73% of the wheat crop there as being in good/excellent condition, a year ago it was only 27%. They also reduced their forecast for 2011/12 soft wheat exports by 200,000 MT to 15.7 MMT citing a lack of competitiveness into its traditional homes in North Africa - particularly Egypt.

The main French port of Rouen only handled 60 TMT of grain for export this week, down by more than a third on last week. Of that total 45 TMT was wheat with Cameroon the top destination.

With one week left to go to bring the 2011/12 marketing year to a close Brussels issued 144 TMT of soft wheat export licences this week, bringing the year to date total to 12.4 MMT, 32% lower than the 18.2 MMT that had been granted at this time a year ago.

Early yield results out of Ukraine and Russia are poor, although it is likely that the worst of the crops are being harvested first. Barley yields in the Crimea region of Ukraine are said to only be coming in at around 2 MT/ha compared with the national average of 3.7 MT/ha last year.

Agritel forecast that the barley crop there will struggle to make 8.0 MMT, and will probably only muster 7.7 MMT versus 9.1 MMT a year ago, although that is still 200,000 MT more than the USDA's latest estimate.

21/06/12 -- EU grains closed mostly higher with Jul 12 London wheat up GBP1.25/tonne to GBP179.75/tonne and Nov 12 also GBP1.25/tonne firmer at GBP159.75/tonne. Aug 12 Paris wheat closed EUR1.75/tonne firmer at EUR212.00/tonne, whilst Nov 12 was EUR1.75/tonne higher at EUR214.25/tonne.

This was the highest close for Jul 12 London wheat since early September 2011, and the best for a front month in a year. New crop Nov 12 London wheat posted its best closing level in exactly a month.

Pretty impressive, and ever so slightly bizarre, considering that outside markets offered little in the way of support. It was quite the opposite in fact, with Brent crude slumping to an 18-month low and US WTI crude down below USD80/barrel for the first time in more than 8 months.

Reports that Algeria bought 600,000 MT of optional origin wheat, thought likely to be French material, was supportive today. Apart from that though there was precious little fresh bullish news about.

The general consensus seems to be that EU wheat and barley production prospects are greatly improved following widespread and heavy rainfall throughout most of the region in the last 8-10 weeks.

Much more rain could however start to damage quality before long. Yields however will surely beat last year in many of the major producing countries.

RMI Analytics described the condition of French barley as "superb" - according to a report on Agrimony.com: "French crops looked fabulous...We were seeing levels of 1,000-1,200 ears per square metre – unbelievable."

20/06/12 -- EU grains closed mixed with Jul 12 London wheat unchanged at GBP178.50/tonne and Nov 12 London wheat also flat at GBP158.50/tonne. Aug 12 Paris wheat rose EUR2.25/tonne to EUR210.25/tonne and Nov 12 was also up EUR2.25/tonne to EUR212.50/tonne.

We appear to be treading water waiting for new crop.

The UK exported almost 129 TMT of wheat in April, bringing the marketing year to date total to 2.24 MMT, slightly down on year ago levels. That fits in nicely with Defra's 2011/12 full campaign estimate of 2.45 MMT.

Barley exports in April were almost 45 TMT, bringing the cumulative YTD total to nearly 764 TMT which already beats Defra's 2011/12 target of 750 TMT.

The UK's rapeseed exports fell to 144 TMT in April, down by a third on March, however the very strong early season pace means that we've shipped 875 TMT of rapeseed abroad in 2011/12, nearly 123% more than in the same period in 2010/11. Germany is the clear top export home, accounting for more than half of all foreign sales.

There's now widespread talk that Russia's wheat crop may have suffered worse winterkill and more recent drought damage than was originally thought. Exports in 2012/13 could fall by at least a third as a consequence it is now estimated.

The minutes of the MPC meeting released today show that the vote not to increase QE this month was narrowly split five against and four in favour. That's a marked difference from the 8-1 against in May and appears to signal that a shift towards further stimulus may be on the cards soon. That may strengthen the pound going forwards.

19/06/12 -- EU grains finished higher with Jul 12 London wheat ending up GBP2.25/tonne to GBP178.50/tonne, and new crop Nov 12 ending GBP2.65/tonne higher to close at GBP158.50/tonne. Aug 12 Paris wheat was EUR1.25/tonne higher at EUR208.00/tonne, whilst Nov 12 was EUR2.75/tonne firmer at EUR210.25/tonne.

Deteriorating crop conditions in the US and Russia were behind today's move higher.

Last night the USDA cut their US corn crop ratings by 3 percentage points in the good/excellent category to 63% versus 70% a year ago. That makes the current USDA yield estimate of a record 166 bushels/acre look particularly unlikely.

SovEcon cut their estimate on grain production in Russia this year to 85 MMT from 88.5 MMT previously and around 9 MMT below last season's total.

Wheat production will fall to 50 MMT, they said (versus 56 MMT on 2011). That's 3 MMT down on their previous forecast and also that from the USDA last month.

Wheat production in the southern Krasnodar district may fall by 40% this year to just 4 MMT, according to the regional governor.

Rabobank were less bearish on Russia's crop prospects, forecasting a wheat crop of 52 MMT.

In addition they also pegged the EU-27 wheat crop at 132.5 MMT, which is 1.5 MMT more than the USDA said last month.

18/06/12 -- EU grains closed mostly higher with Jul 12 London wheat up GBP1.25/tonne to GBP176.25/tonne and Nov 12 GBP1.85/tonne firmer at GBP155.85/tonne. Even inactive Aug 12 Paris wheat managed to close EUR3.75/tonne firmer at EUR206.75/tonne, whilst Nov 12 was also EUR3.75/tonne higher at EUR207.50/tonne.

News that the pro-austerity New Democracy party came out top in the Greek elections on Sunday - albeit by a narrow margin - provided a short-lived boost to equities. That was quickly erased though as Spanish 10-year borrowing costs pushed above the widely regarded as unsustainable 7% level for a fresh eurozone era high.

Widely touted heavy weekend rains in the US largely disappointed, which saw the electronic Globex market trade higher throughout the day, with those gains increasing once Chicago began trading in the afternoon. That strength spilled over into European trade.

"Instead of very heavy rainfall, showers were light and scattered from a stronger-than-expected ridge of high pressure that stabilized the atmosphere and diminished rainfall," said Martell Crop Projections.

"Corn moisture needs are rising at the very same time that ground moisture is declining. Most corn is already in the rapid growth phase, due to early seeding dates. This is placing a tremendous demand on the soil for water," they added.

Meanwhile drought that originally began in Ukraine and southern Russia has now shifted eastward into the Volga Valley, Urals and Siberia, they say.

"This opened the door for increased rainfall in eastern Ukraine and southern Russia, and staving the tide of deterioration. At the same time, intensifying heat stress and drought is damaging prospects in Russia's vast spring grain belt. Wheat production may finish worse that the 53 MMT projected by USDA in June, already cut 3 MMT from the May estimate," they conclude.

15/06/12 -- EU grains closed mostly lower with only Jul 12 London wheat bucking the trend and finishing GBP0.25/tonne higher at GBP175.00/tonne. Nov 12 London wheat fell GBP1.80/tonne to GBP154.00/tonne. Even inactive Aug 12 Paris wheat fell EUR2.25/tonne to EUR203.00/tonne, whilst Nov 12 was also down EUR2.25/tonne at EUR203.75/tonne.

For the week as a whole Jul 12 London wheat was up GBP3.50/tonne, whilst Nov 12 was GBP3.00/tonne lower. Across the Channel Aug 12 Paris wheat fell EUR5.00/tonne and Nov 12 lost EUR5.75/tonne.

The market is nervous ahead of the Greek elections this weekend, against a backdrop of spiralling borrowing rates for for the likes of Spain and Italy.

The widespread rains across western Europe that prompted Strategie Grains to raise their EU-27 wheat, barley and corn production forecasts yesterday (and indicate that further increases could be expected) have spread eastwards, taking in Poland and Romania and now Ukraine.

These rains may have come too late to help winter barley in Ukraine, the harvesting of which began at the beginning of the week in the south of the country, but will surely be of benefit to wheat as well as spring barley and corn.

The Ukraine state statistical service reports that June 1st grain stocks were 79% higher than year ago levels at 10.9 MMT thanks to minimal sales in Q1 of 2011/12 when an export ban was still in place.

Algeria said that it's 2012 grain harvest will come in 38% higher than last year at 5.8 MMT, and that it won't need to import any more durum wheat or barley for the remainder of the year.

Brussels announced that they have decided to extend the temporary suspension of duties on feed wheat imports from outside the Union, due to expire at the end of the month, until the end of the year.

14/06/12 -- EU grains finished mixed with Jul 12 London wheat ending up GBP0.85/tonne to GBP174.75/tonne, and new crop Nov 12 ending GBP0.30/tonne higher to close at GBP155.80/tonne. Aug 12 Paris wheat - in which there is only a thimble full of open interest - was unchanged at EUR205.25/tonne, whilst Nov 12 was also unchanged at EUR206.00/tonne. Other new crop months were between EUR0.25-1.25/tonne lower.

Strategie Grains increased their forecast for the 2012 EU-27 soft wheat crop by 1.5 MMT to 124.2 MMT, citing improved crop conditions, particularly in Western Europe.

France had it's crop increased by 0.9 MMT and Germany's was upped 0.5 MMT. With EU-27 durum output also seen 0.3 MMT higher than last month at 7.9 MMT, that gives us an EU-27 2012/13 all wheat crop of 132.1 MMT, which is 1.1 MMT more than the USDA projected on Tuesday.

The early durum harvest in Spain and Italy has produced some good quality wheat, they said.

Wheat export potential was increased by 2 MMT from last month to 13.5 MMT, but despite that the extra production and reduced feed usage means that 2012/13 ending stocks were also raised slightly.

The improved European weather conditions are also responsible for a barley production increase of 0.5 MMT to 53.2 MMT and corn output being forecast 0.4 MMT higher to 66 MMT versus May projections.

Further production upgrades could also be on the cards if favourable weather conditions continue, they added.

With only two weeks to go to the end of the 2011/12 marketing year Brussels issued 117 TMT of soft wheat export licences this past week, bringing the year-to-date total to 12.3 MMT, almost a third lower than last season.

FranceAgriMer keep edging up their 2011/12 French grain stocks estimates as their exports remain more sluggish than expected.

The euro held up rather well today in the light of yields on Spanish 10-year bonds jumping to a Euro-era high of 7% and yields on Italian 3-year bonds also sharply higher than they were a month ago. The next hurdle is the Greek elections on Sunday.

Spain had it's credit rating cut to only one notch above junk status by Moody's last night, whilst Cyprus had theirs flushed even further down the lavatory.

13/06/12 -- EU grains closed mixed with Jul 12 London wheat up GBP1.25/tonne to GBP173.90/tonne and Nov 12 GBP1.50/tonne firmer at GBP155.50/tonne. Inactive Aug 12 Paris wheat was unchanged at EUR205.25/tonne, whilst Nov 12 was also unchanged at EUR206.00/tonne.

ABARES forecast the Australian wheat crop at 24.1 MMT this year, 7.3% down on its March estimate and 18% below last year's record output.

Dryness in Western Australia and a switch out of wheat to potentially more profitable rapeseed production was behind the reduction. 2012/13 Australian wheat exports were estimated at 20.5 MMT vs. 2011/12 exports of 22.3 MMT.

FranceAgriMer said that French 2011/12 non-EU soft wheat exports would total 8.5 MMT, down 0.2 MMT from their previous estimate of 8.7 M and 34% below the 12.9 MMT exported in 2010/11.

The also pegged 2011/12 soft wheat exports to fellow EU members at 7.12 MMT, up slightly on their previous estimate of 7.1 MMT.

French 2011/12 soft wheat ending stocks are estimated at 2.51 MMT from their previous estimate of 2.36 MMT. These carryout forecasts have been creeping up steadily in recent months as exports to non-EU destinations have fallen away as other origin wheat has made inroads into traditional French homes in North Africa.

The German Farm Cooperatives (DRV) downgraded Germany’s 2012 wheat crop to 21.38 MMT versus their previous estimate of 22.0 MMT, and 0.5 MMT below yesterday's USDA forecast, citing significantly higher levels of winterkill than had been expected.

German barley production however will rise 3.2% to 9.0 MMT and rapeseed output will jump 18% to 4.52 MMT, they said.

Ukraine's Ag Ministry said that the country will export 26 MMT of grains in 2012/13, an increase of 13% on this season, despite a fall in production of almost 17%. High carryover stocks from the current season and no export restrictions are the reason for the disparity, they say.

Anecdotal reports reveal that the winter barley harvest began yesterday in the Crimea area of Ukraine.

The European debt crisis continues to keep market participants nervous with the Greek elections looming at the weekend. Yields on Italian one year bonds jumped from 2.34% a month ago to 3.972% today. That's bad news as tomorrow they will attempt to auction off longer-term debt tomorrow.

Meanwhile Spanish 10-year yields are now at 6.72% and the German press is apparently reporting that Greece could be in need of a third bailout soon.

12/06/12 -- EU grains closed lower Tuesday with Jul 12 London wheat down GBP0.35/tonne to GBP172.65/tonne and Nov 12 falling GBP2.80/tonne to GBP154.00/tonne. Even inactive Aug 12 Paris wheat fell EUR2.75/tonne to EUR205.75/tonne, whilst Nov 12 was down EUR3.75/tonne at EUR206.00/tonne.

The long awaited USDA report came in bearish for corn, slightly friendly for wheat and bullish for soybeans. The question was could wheat post gains whilst corn slumped? The answer was no, at least not today anyway.

For corn there wasn't a bullish number in sight. So despite the usual trade scepticism over the accuracy of the data, Chicago corn futures - which opened a couple of hours early to accommodate the release of the report - came in lower and quickly dragged wheat with it.

For corn, we got unchanged US old and new crop ending stocks, contrary to expectations for reductions in both. We also got a larger than expected increase in Brazilian output this season, a lower than anticipated cut to Argentine production and an extra 2 MMT added to China's 2012 harvest to boot.

The net result of that was a 2012/13 world record 950 MMT corn crop, more than 4 MMT up on last month's estimate and global ending stocks for the coming season 6 MMT more than expected.

The EU-27 wheat crop was cut to a lowish-looking 131 MMT, and Russia's production reduced from 56 MMT last month to 53 MMT this time round. World wheat ending stocks for 2012/13 were trimmed 2.4 MMT to 185.8 MMT, although this was a smaller cut than expected and represents more than ample stocks to usage.

America's wheat crop was reduced slightly from last month, although at 60.8 MMT it's still an increase of nearly 12% on last year.

Soybeans continue to look the strongest leg of the three, with US old and new crop ending stocks cut more than anticipated and Chinese imports for 2011/12 raised 1 MMT to 57 MMT and those of 2012/13 pegged at a record 60 MMT.

Attention is already starting to re-focus on Europe with the Greek elections coming up this weekend and Spanish and Italian borrowing costs back on the rise today following yesterday's short-lived, and misplaced, euphoria.

At home, the HGCA say that winter cereals are close to or slightly behind average development. "Crops currently have good yield potential, but disease pressure is high," they add.

"In France, 72% of the winter wheat crop was rated good to excellent on 4 June, considerably higher than the 24% at the same stage last year," they note.

They also say that recent rains in Germany and Poland have helped to improve crop conditions there.

Elsewhere, UkrAgroConsult said that despite the lower grain output anticipated there this year they see Ukraine's 2012/13 total grain exports rising 20% to 24.3 MMT due to that fact that export restrictions heavily curtailed shipments during the first half of the current season.

11/06/12 -- EU grains finished mixed with Jul 12 London wheat ending up GBP1.50/tonne to GBP173.00/tonne, and new crop Nov 12 ending down GBP0.20/tonne to close at GBP156.80/tonne. Aug 12 Paris wheat was unchanged at EUR208.00/tonne, whilst Nov 12 was EUR0.25/tonne firmer at EUR209.75/tonne.

Early euphoria that Spanish banks had secured a bailout over the weekend quickly subsided as it was soon realised that the European debt crisis is far from over. Attention now is starting to fix on Greece and it's upcoming elections this weekend. The possibility of an anti-austerity victory and a possible eurozone exit, and the subsequent contagion that would cause, would bring far more chaos and misery than advancing Spanish banks EUR100 billion would.

The French Ministry said that winter barley production there will slide 10% to 5.7 MMT, despite a rise in yields 058 5.5% due to the harvested area dropping 15% due to winter kill. In contrast the spring barley planted area has soared more than 80% to almost equal that of the winter barley harvest, they added.

Corn sowing this year is also expected to increase, up 5.7% to 1.68 million hectares. The winter rapeseed harvested area will decline almost 10% to 4.84 million hectares due to similar problems that afflicted winter barley, they added.

There was no word on French winter wheat production potential, but we do know that they exported 13.8 MMT of soft wheat from July – April down 17% from a year ago.

The USDA's June supply and demand and crop production report comes out tomorrow afternoon. For wheat there aren't too many significant changes anticipated, with small reductions to US wheat production and ending stocks.

Following that we have Australia's ABARES releasing their crop production report on Wednesday, with most trade estimates for wheat production there in 2012/13 lining up around 1 MMT below last month's forecast of 26 MMT.

08/06/12 -- EU grains closed narrowly mixed Friday, with Jul 12 London wheat down GBP0.50/tonne to GBP171.50/tonne and Nov 12 GBP0.25/tonne firmer at GBP157.00/tonne. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 decided to also join the unchanged club closing at EUR209.50/tonne.

For the week as a whole Jul 12 London wheat up GBP0.50/tonne and Nov 12 GBP2.25/tonne. Aug 12 Paris wheat was unchanged and Nov 12 was EUR0.75/tonne higher.

It's been a lacklustre week here in the UK with the markets closed Monday and Tuesday, with trading in Paris also relatively subdued, whilst it's been another choppy week over in the US.

FranceAgriMer say that taking winter losses into account the soft wheat harvested area there is expected to have dropped 5.4% to 4.72 million hectares this summer. French barley plantings have climbed 16% this year to 1.79 million hectares from 1.55 million hectares in 2011 and the spring corn harvested area is seen rising 6.1% to 1.64 million hectares.

May rains have continued into June, with French soft wheat crop ratings steadily improving, France AgriMer now rate 72% of the crop as being in good/excellent condition - up 7 percentage points in the past four weeks.

Following a string of varied, and mostly fairly bullish, forecasts on Russian grain production potential this week, SovEcon today came out with a plausible 87 MMT harvest total, of which 53 MMT will be wheat. That's a cut of 7.6% on total grain output, and a reduction of 5.7% for wheat.

Russia's export potential will decline much more steeply however. In the case of total grains to 18 MMT, a third less than in the current marketing year, with wheat accounting for 14 MMT of that (down 30%), they said.

Offical estimates still peg the 2012 grain harvest at around 92-94 MMT, with exports totaling 21-23 MMT.

The Ukrainian Agrarian Business Club estimate Ukraine’s 2012/13 grain output at 46-47 MMT, down around 18% on last season's 56.7 MMT.

Meanwhile the European crisis rumbles on. Fitch downgraded Spain’s credit rating by 3 notches yesterday and the word on the streets tonight is that the Spanish government will make a formal request for EU aid for its stricken banking sector over the weekend whilst the markets are closed. Estimates as to how much they may need are anywhere between EUR30-100 billion.

08/06/12 -- EU grains closed narrowly mixed Friday, with Jul 12 London wheat down GBP0.50/tonne to GBP171.50/tonne and Nov 12 GBP0.25/tonne firmer at GBP157.00/tonne. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 decided to also join the unchanged club closing at EUR209.50/tonne.

For the week as a whole Jul 12 London wheat up GBP0.50/tonne and Nov 12 GBP2.25/tonne. Aug 12 Paris wheat was unchanged and Nov 12 was EUR0.75/tonne higher.

It's been a lacklustre week here in the UK with the markets closed Monday and Tuesday, with trading in Paris also relatively subdued, whilst it's been another choppy week over in the US.

FranceAgriMer say that taking winter losses into account the soft wheat harvested area there is expected to have dropped 5.4% to 4.72 million hectares this summer. French barley plantings have climbed 16% this year to 1.79 million hectares from 1.55 million hectares in 2011 and the spring corn harvested area is seen rising 6.1% to 1.64 million hectares.

Following a string of varied, and mostly fairly bullish, forecasts on Russian grain production potential this week, SovEcon today came out with a plausible 87 MMT harvest total, of which 53 MMT will be wheat. That's a cut of 7.6% on total grain output, and a reduction of 5.7% for wheat.

Russia's export potential will decline much more steeply however. In the case of total grains to 18 MMT, a third less than in the current marketing year, with wheat accounting for 14 MMT of that (down 30%), they said.

Offical estimates still peg the 2012 grain harvest at around 92-94 MMT, with exports totaling 21-23 MMT.

The Ukrainian Agrarian Business Club estimate Ukraine’s 2012/13 grain output at 46-47 MMT, down around 18% on last season's 56.7 MMT.

Meanwhile the European crisis rumbles on. Fitch downgraded Spain’s credit rating by 3 notches yesterday and the word on the streets tonight is that the Spanish government will make a formal request for EU aid for its stricken banking sector over the weekend whilst the markets are closed. Estimates as to how much they may need are anywhere between EUR30-100 billion.

07/06/12 -- EU grains closed mostly higher Thursday with Jul 12 London wheat up GBP0.50/tonne to GBP172.00/tonne and Nov 12 GBP1.75/tonne firmer at GBP156.75/tonne. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 was EUR3.00/tonne higher at EUR209.50/tonne.

There was a thin air of optimism about that the US and EU would come up with some form of new stimulus package, boosted by the news that China had cut interest rates for the first time since the 2008/09 collapse in global markets.

The FAO raised its forecast for world grain production in 2012/13 to 2.42 billion tonnes from 2.37 billion, and increased ending stocks to 548 MMT from 524 MMT. The global wheat crop was raised 5 MMT to 680 MMT, although world wheat ending stocks were cut from 183 MMT to 181 MMT - 7 MMT lower than the USDA currently project.

The USDA will issue revised world supply & demand estimates on Tuesday next week.

Also next week we have ABARES crop report due on Wednesday. "In the coming week up to 25 mm of rain is forecast for cropping areas of Western Australia. The rain should provide much needed moisture for the germination of recently sown winter crops," they said yesterday.

The Greek elections, now little over a week away, also have the potential to be a game-changer. Greek 10-year bonds are currently trading with a yield of around 28%.

Speaking at the IGC conference in London the USDA's chief economist Joseph Glauber said that record US corn production this year should help ease market volatility and see prices fall significantly in 2012/13 as stocks rebound and demand from the ethanol sector remains flat.

The Russian Ministry forecast this season's grain crop at 92-94 MMT from 94.2 MMT last year and see 2012/13 exports at 22-23 MMT versus 27 MMT in 2011/12.

06/06/12 -- EU grains finished higher with Jul 12 London wheat ending up GBP0.50/tonne to GBP171.50/tonne, and new crop Nov 12 climbing GBP0.25/tonne to close at GBP155.00/tonne. Aug 12 Paris wheat was unchanged at EUR208.00/tonne, whilst Nov 12 was EUR1.00/tonne firmer at EUR206.50/tonne.

It was a day of mixed influences, but none of them particularly dramatic, in a kind of "is the glass half full, or half empty" sort of a day.

The USDA attaché in Russia estimated that grain production there this season would amount to 88 MMT this year down 6% from last year's 94 MMT. Wheat production will come in at 54 MMT, 2 MMT lower than the official number from Washington last month, although higher than some other estimates in the market, they said.

Exports will however be harder hit, with total grain exports of 19 MMT representing a fall of 30% on this season's 27.1 MMT. Wheat shipments declining by 24% to 16 MMT, they estimate.

Many farmers complained that there was practically no spring this year, as cold winter weather suddenly switched to summer heat and dryness, they commented.

"This sudden onset of very hot temperatures resulted in snow quickly melting and evaporating rather than soaking into the soil to improve moisture levels. In addition, this weather has sped up the development of winter wheat, with heading occurring 2 weeks early in many parts.

"In some areas there was no rain from the first week of April through mid to late May and this significantly impacted the growth of winter wheat. Although rains began to fall at the end of May and this will help in filling of grain, the yield potential is expected to already have been significantly damaged by the previous dryness. These May rains, however, are expected to be beneficial for sown spring crops, including corn and sunflowerseeds," they concluded.

At home, the HGCA said that "the total area planted to cereals and oilseed rape by 1 December 2011 in England and Wales is estimated 5% higher than in December 2010 at 2.984M ha. The England and Wales wheat area planted by 1 December 2011 is estimated 3% higher than the previous December at 1.862M ha."

Private US analytical firm Informa Economics raised their US winter wheat crop production forecast to 1.676 billion bushels, up 1.2% from their May forecast. Wheat development has been notably much faster than normal during May, with crop conditions significantly better than the five year average, they observed.

05/06/12 -- Paris grains finished mixed with London closed for a second day for the Queen's Jubilee celebrations. Nov 12 Paris wheat was down EUR1.00/tonne to EUR205.50/tonne, it's lowest close in thirteen sessions.

Decent weekend rains across the UK, France and western half of Germany have extended into the beginning of the week, boosting crop prospects further.

Some rain also fell in parched Western Australia, with more in the forecast for the week ahead. Recent rains may also have drawn a line under deteriorating crop conditions in Russia and Ukraine it is hoped.

Tomorrow all eyes will be on Europe, once again, with some pundits forecasting a drop in interest rates from the ECB. Others are calling for an increase in QE to attempt to boost growth.

At home survey by Lloyds Banking Group shows business confidence slumping from a positive reading of 26 points to a negative one of 21 points.

London wheat will play catch up tomorrow after an extended holiday. Paris wheat has been down on both of the last two days, and Chicago wheat is more than 30c lower based on its close on Friday night through to Tuesday night so a downwards opening seems the most likely.

04/06/12 -- Paris grains finished mostly lower with the London market closed for a two day public holiday. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 was EUR2.25/tonne lower at EUR206.50/tonne. Corn was one wuro firmer to one euro lower, whilst rapeseed ended with losses of EUR5-6.00/tonne.

European markets were playing catch-up with a sharply lower US wheat close on Friday night, although the overnight electronic market did manage to reverse some of those losses today.

European concerns are never far away, with fabled billionaire investor George Soros warning that EU leaders only have a three-month window left to save the euro. The German economy will soon start to weaken under the burden of trying to keep the eurozone intact, he says, making it more difficult for Angela Merkel to sell the idea of increased financial responsibility to the German electorate and tax-payers.

Crude oil was under pressure again for most of the day, extending recent losses on fears over the health of the global economy.

Weekend rains in the US were lighter and less widespread than had been hoped, allowing grains there to rebound somewhat from last week's losses.

The Ukrainian Grain Association say that grain carryover stocks at the end of the 2011/12 marketing year could be as high as 12 MMT after the government there were slow to remove export restrictions earlier in the season. That should compensate for winter wheat losses and allow them to participate in a full export programme in 2012/13, led by corn.

Kazakhstan will have healthy grain carryover stocks of 5 MMT, according to the Minister of Agriculture, and that's only if they can manage to export 4.5 MMT in the last two months of the marketing year, which sounds rather ambitious in the current climate.

Kazakh spring grain plantings are 96% done, he added. Russian spring sowings are at around a similar stage of completion, whist Ukraine's are said to have already exceeded expectations.

Winter crop conditions in the latter are said to be 68% good/satisfactory, with winter wheat rated 71.4% good/satisfactory.

Rusagrotrans say that an optimistic assessment of the 2012 grain harvest potential in Russia places the total crop at around 93.4 MMT - only marginally down on last year. A "moderate" estimate would be 89.6 MMT and a pessimistic one 82 MMT. The middle ground figure would allow them to export 19 MMT of grains in 2012/13, they say.

Ukraine meanwhile says it is hoping to export 3 MMT of corn to China in the coming season, which would be a knock to US export hopes if they can allay the Chinese authorities fears on quality issues.

01/06/12 -- EU grains finished generally lower with Jul 12 London wheat ending down GBP0.60/tonne to GBP171.00/tonne, and new crop Nov 12 falling GBP0.40/tonne to close at GBP154.75/tonne. Aug 12 Paris wheat was unchanged at EUR208.00/tonne, whilst Nov 12 was EUR2.75/tonne lower at EUR208.75/tonne.

The pound was under pressure on news that British manufacturing activity shrank at its fastest pace in three years last month. That helped London wheat to suffer smaller losses than across the Channel.

On the week as a whole Jul12 London wheat fell GBP4.00/tonne and Nov 12 GBP4.75/tonne. Aug 12 Paris wheat shed EUR4.75/tonne and Nov 12 EUR7.75/tonne.

There are still pockets of old crop wheat kicking around on farm in the UK, with long-holders hoping for once more shot at a big payday. It should be noted that Jul 12 feed wheat at GBP171.00/tonne is the equivalent of EUR212.00/tonne, so export interest is going to be zero at these levels.

There's also said to be more than 100,000 MT of wheat sat in futures stores in the UK. Given that new crop off the combine is running at around a GBP30.00/tonne discount to old crop, carrying the latter to the wire is a risky strategy.

As far as new crop is concerned, the life-saving April/May rains mean that the UK cereal crop has good potential, although they also bring increased disease risk, say the HGCA.

Meanwhile FranceAgriMer raised their estimate on the proportion of the soft wheat crop there rated good/excellent to 70% today, very substantially better than just 24% this time last year. Both winter barley and spring barley ratings were also increased to 65% and 83% good/excellent respectively. Corn good/excellent also improved, jumping five percentage points from 64% last week to 69% this time round.

Harvest pressure will be upon the French market by the middle of the month, the first winter barley of 2011 had already been cut before the end of May this time last year. With EU wheat exports lagging year ago levels by almost a third, carryover stocks into 2012/13 may be larger than was anticipated. FranceAgriMer recently raised their estimates on 2011/12 French ending stocks for both wheat and barley due to lower exports than expected.

The harvest should also be underway in the south of Russia and Ukraine by the end of the month too. We may have a clearer idea of what the impact has been of the recent arrival of rain will be by then. In the south of Russia wheat is said to be generally very short, much as it was here in the UK twelve months ago, although it will be remembered that we still ended up with surprisingly good yields here.