London Wheat Hits Fresh Contract Highs

01/11/12 --  EU wheat closed mixed, with Nov 12 London wheat pressing on to a fresh contract high of  GBP213.00/tonne at one stage, before closing GBP0.50/tonne lower at GBP210.00/tonne. New crop Nov 13 closed GBP2.50/tonne firmer at a contract high GBP188.50/tonne.

Nov 12 Paris wheat ended EUR2.50/tonne firmer at EUR267.75/tonne - towards the upper end of the recent trading range and also close to the lifetime contract high.

SovEcon cut their estimate on Russian wheat production to 37.5 MMT, down  33% on 56.2 MMT a year ago. They also reduced their forecast for Russian grain output this year to 69 MMT- down almost 28% from 95.4 MMT in 2011.

Russian Ministry data shows that they have exported 10.3 MMT of grains so far this year, including 8.2 MMT of wheat, 1.4 MMT of barley and 514 TMT of corn.

The Ukraine Ministry said that they have exported 4.125 MMT of wheat so far this season, leaving around 1.4 MMT to go before they reach their suggested ceiling of 5.5 MMT.

It would seem that it is only a matter of time before both Russia and Ukraine are out of the wheat export market. With two thirds of the 2012/13 marketing year remaining then EU-27 sales should pick up markedly from here on in.

Buenos Aires-based agricultural consultant Manuel Alvarado Ledesma says that corn production there could fall to 22.4 MMT this year.

"Given all the hail, rain, waterlogging and flooding we've seen, some corn fields will be lost. Others can still be replanted, but with uncertain results," he said. The USDA currently have the Argentine corn harvest down at 28 MMT in 2012/13.

Meanwhile the US winter wheat crop "has got off to its worst start since records began, undermined by poor conditions which have forced some farmers to reseed," report