Nogger's Blog

28/03/11 -- May London wheat closed GBP3.25/tonne firmer at GBP200.50/tonne with new crop Nov up GBP3.00 also to GBP200.50/tonne. May Paris wheat rose EUR5.50/tonne to EUR242.25/tonne and Nov was up EUR2.25/tonne to EUR209.25/tonne.

The pound fell to it's lowest levels against the US dollar for two months, and to a five month low versus the euro on ideas that a stalling UK recovery will put any thoughts of an interest rate rise on hold.

Almost all of Europe has had a very dry last two months compared with normal, click the map from the excellent Martell Crop Projections to enlarge it, with all but Italy, Spain, Portugal, Scotland and Ireland getting only between 20-60% of normal precipitation.

Rains are in the forecast for many of the areas in moisture deficit later in the week, which will hopefully improve the situation, although normal soil moisture profiles are unlikely to be fully restored.

Coceral peg the EU-27 soft wheat crop at 131.44 MMT, an increase of 3.5% on last year. The UK is seen accounting for 15.5 MMT of that, a 7.6% increase on 2010, with France and Germany chipping in with 36.4 MMT (+ 2%) and 24.4 MT (+4.7%) respectively.

Barley production is forecast at 54.5 MMT, up 3.1%, with the UK crop coming in at 5.3 MMT, up 6.3% on 5.0 MMT last year.

Whilst European weather is of some concern, the situation for US wheat looks far worse where "the big picture is one of severe drought in the Southwest Plains with too much heat and not enough rain," say Martell Crop Projections.