Nogger's Blog

06/01/11 -- EU wheat futures closed mixed Thursday. London wheat finished with Jan down GBP1.25 to GBP196.75/tonne and Nov was GBP0.95 higher at GBP171.00/tonne. Paris wheat saw soon to expire Jan up EUR1.25 at EUR257.75/tonne and Nov EUR1.750higher at EUR227.75/tonne.

Paris wheat was aided by a weak euro, which slipped close to 1.19 against the pound, it's worst in 3 1/2 weeks.

Chicago grains fell on talk of fund selling and profit-taking ahead of next week's crucial USDA reports on global supply and demand, US production for corn and soybeans, winter wheat plantings and quarterly grain stocks.

UK consumers remain nervous and certainly haven't stopped buying wheat even at these levels, although a more hand-to-mouth approach generally seems to have been adopted for now.

They are certainly conscious however that coverage past March/April is light, and given the expected tightness in old crop availability by then will perhaps be reluctant to leave too much covering-in to the last minute there.

Tunisia were in the market today, booking 100,000 MT of optional origin wheat and 25,000 MT of barley.

Informa Economics pegged this season's Australian wheat crop at a near record 26 MMT. The market seems to be waking up to the idea that despite the widely reported problems, rain does indeed make grain. It might not always make very good quality grain, but it normally makes up for it in terms of volume.

They will likely be aggressive marketeers of feed wheat into Asia and beyond in 2011, although the strength of the Aussie dollar won't help.