Nogger's Blog

22/03/12 -- EU grains finished mostly higher. Expiring tomorrow Mar 12 London wheat closed GBP3.00/tonne higher at GBP175.00/tonne without trading, the soon to be new front month May 12 ended GBP0.50/tonne firmer at GBP170.25/tonne. May 12 Paris wheat was up EUR1.50/tonne to EUR210.25/tonne.

The market is clearly all over the place, based on tonight's close front month London wheat has gained 15% on 2011's closing levels, it's Paris counterpart has added 3.7% whilst in Chicago prices are 1% lower!

Traders are struggling to assess the affects of last month's hard freeze combined with a distinct lack of moisture in Western Europe.

February's cold wave may have lopped 5 MMT off this year’s EU-27 wheat harvest, and a lack of rain might further harm output, said one report on Bloomberg quoting Offre et Demande in France.

Whilst a combination of drought and extreme cold may be harming European wheat prospects, it's likely to be helping corn potential. Ukraine might plant as much as 5 million hectares of corn for the 2012 harvest, a 38 percent increase on last year, according to the Interfax-Ukraine news agency today.

Meanwhile across the pond winter wheat crop conditions have improved, fairly dramatically in some cases, since crops went into dormancy. Rains this week are seen helping crop ratings improve some more next week.