Nogger's Blog

15/11/10 -- EU wheat futures closed with Nov10 London wheat closing up GBP0.50 at GBP163.75/tonne, although Nov11 London wheat was GBP2.00 to GBP146.00/tonne. Jan11 Paris wheat closed EUR6.25 higher at EUR218.75/tonne and Nov11 Paris wheat was up EUR2.50 to EUR197.50/tonne.

Paris wheat gained relative to London grain as the euro slipped to 1.18 against the pound on continued worries over Irish debt and weekend rumours that talks are already talking place at a high level over the implications of a default.

Early weakness was tied to Friday night's limit down close on CBOT corn and soybeans plus a sharply lower finish for wheat. Last week's rumours over a weekend Chinese interest rate hike appeared to be unfounded as no such move occurred.

That led to a rebound in the overnight Globex market, which continued into this afternoon's CBOT session, with corn retracing all of it's 30c losses from Friday. posting similar gains by mid-session.

That move was prompted by an announcement from Argentina that it was in talks with China to strike a deal to export 5 MMT of corn to the Far East nation during 2011.

That said, rumours abounded three or four weeks ago of substantial US corn sales to China which subsequently proved unfounded. A move by the Chinese government today to restrict the volume of corn that local feed millers can buy in it's regular weekly auctions hints that domestic stocks are indeed dwindling however.