Nogger's Blog

07/03/11 -- EU wheat closed lower with Mar London wheat down GBP1.20 to GBP195.35/tonne and new crop Nov GBP1.75 easier at GBP161.25/tonne. Mar Paris wheat fell EUR4.50 to EUR248.50/tonne, with Nov down EUR5.00 lower at EUR212.00/tonne.

EU wheat was modestly higher for much of the day, but fell away later in the session as Chicago futures quickly moved sharply lower shortly after the opening.

A strong euro was also a negative factor for French wheat prices relative to those in the UK. Rising crude oil prices as tensions escalate even further in the Middle East seems to be drawing money out of grains too, unlike the trend witnessed back in 2008.

A wetter outlook for dry Kansas was one of the reasons behind Chicago's demise with snowfalls of up to 10 inches on the cards for tonight/tomorrow, followed by rapid snow melt as temperatures push into the 60's and 70's by the end of the week, according to QT Weather.

In Europe, a lasting winter drought is still a big worry, with France, Slovakia, Hungary and the Balkans having had less than half of normal precipitation in the past 65 days. Germany and Poland are also now trending dry although the United Kingdom and Spain have been wetter, with increased soil moisture beneficial for winter crop development, say Martell Crop Projections.

Elsewhere in the Russia Volga and Black Earth regions winter wheat got more snow on Sunday. Temperatures here have moderated after a very cold February. More precipitation is needed in Russia Black Sea wheat, with temperatures now warming up to 40s-50s F, they add.