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| EU volatility drives markets down |
| 5/27/2010 |
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International wheat values continue to decline, in part because of the general softness in commodities stemming from uncertainty over the pace of the world's economic recovery.
The recent sharp decline of the Australian dollar has improved local grain prices; however, volatility is likely to continue due to the ongoing uncertainty in the European Union.
The International Grains Council recently increased its 2010-11 world wheat production forecast.
The planted area in Argentina is expected to increase by almost one million tonnes, even though only 7 per cent of the 4.2 million hectares have been planted to date.
Other forecasters are predicting that Russia's carry over stocks will total around 14 to 15 million tonnes, which is 1 to 2 million tonnes more than was forecast in the March USDA report.
Growing regions throughout western Europe, however, are still in need of a good drink and if rainfall is below normal throughout early June production estimates will start to fall.
In the US, the USDA has forecast production of 2,043 million bushels (55.6mmt) this harvest.
Recent volatility in CBOT futures values coupled with a large global carryover of 2009-10 season stock and large plantings for 2010-11 have prompted a lot of interest in the managed pool.
Growers only have a few days left to sign up for the 2010-11 managed pool, which is set to close on May 31.
It provides an option for growers.
The pool has four key hedging periodeach with its own guidelines for the level of hedging cover.
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