Nogger's Blog

27/01/11 -- EU wheat futures closed mixed with Mar London wheat GBP0.50 higher at GBP204.00/tonne, and Nov down GBP0.35 at GBP174.50/tonne. Paris wheat closed with Mar down EUR1.25 to EUR264.75/tonne and Nov down EUR0.75 to EUR233.25/tonne.

March London wheat set another all-time high close for a front month on the back of a weaker pound/euro this past couple of weeks. The pound has fallen form over 1.20 to 1.16 in little more than a fortnight. Tuesday's insipid Q4 GDP data didn't help.

Paris wheat also set contract highs earlier in the day before settling slightly lower later on.

News that Brussels only issued 240,000 MT of soft wheat export licences this past week maybe took some of the wind out of the bull's sails, although there is no doubting that they still have a very strong headwind behind them. We've maybe dropped back to a force eight or nine on the Beaufort scale, that's all.

US weekly export sales were strong at over 1 MMT and tender results from a variety of different buyers are expected imminently. At this stage it probably doesn't matter if US, EU, Australian or Argentinean wheat wins - the point is that somebody will and that takes another million or two off the table.

As well as confirming having bought "at least" 1.75 MMT of wheat since the turn of the year, Algeria is also thought to have purchased a further 800,000 MT of durum wheat in recent weeks.

Much of the latter is expected to have come from France, where durum wheat prices delivered to Port La Nouvelle have risen from EUR270-275/tonne to EUR335-340/tonne since the turn of the year - an increase of around 25%.