EU Wheat Extends Rally

Posted by Nogger - a legend in his own mind at 09:38 | Categorized as

28/12/11 -- EU grains extended their recent rally with Jan 12 London wheat climbing GBP4.00/tonne to GBP151.00/tonne, Jan 12 Paris wheat rising EUR3.50/tonne to EUR200.50/tonne.

It was a largely hot and dry Christmas in Brazil and Argentina that propelled London wheat to the best close in almost eight weeks and Jan 12 Paris wheat to the highest close since September.

London wheat was playing catch-up after Chicago wheat was around 20-22 cents firmer last night and Paris wheat closed EUR2.00/tonne higher.

Whilst coming too late to damage wheat production the recent heat wave and dry spell are seen potentially trimming corn and soybean output in South America.

Local analysts there such as Michael Cordonnier now peg corn production in Brazil at 60 MMT and in Argentina at 27 MMT, whilst these estimates are lower than the USDA currently say (by 1 MMT and 2 MMT respectively) they are still both all time highs.

Elsewhere Russia’s Ag Ministry pegged the 2011 grain crop at 93.8 MMT in clean weight, a 54% increase on 2010, reiterating the potential to export 25 MMT in 2011/12.