EU Wheat Close

Posted by Nogger - a legend in his own mind at 22:42 | Categorized as

21/01/11 -- Jan London wheat went off the board today, closing unchanged at GBP194.50/tonne, with new crop Nov GBP2.00 higher at GBP172.00/tonne. Mar Paris wheat rose EUR0.75 to EUR259.50/tonne, whilst new crop Nov climbed EUR2.00 to EUR229.75/tonne.

Nov London wheat posted a new all-time high close for the contract. Also I hear confidentially, but I can tell you as we're mates, that new crop is now trading at GBP160/tonne off the combine.

The market seems poised for another move higher on concerns over dwindling stocks. The IGC and Strategie Grains have both reported this week that 2010/11 ending stocks will be higher than earlier estimates, the question is will they really though?

UK and EU exports are well ahead of schedule, indeed UK exports for the first five months of 2010/11 have already exceeded official Defra estimates for the entire marketing year. Today we had news that US weekly export sales were over 1 MMT - the highest at this time of year since 2005.

North African and Middle Eastern buyers are queuing up to buy wheat despite prices being at their highest levels in at least 2 1/2 years, so where is the price rationing? One trader said to me today that it was astonishing that it was easier to trade at these levels than it was when prices were £30/tonne cheaper.

On the weather front European weather is now trending cooler again after a warm period that coaxed wheat and rapeseed out of dormancy. Weekend snow will develop in Eastern Germany/Poland, and a major Mediterranean storm will bring heavy precipitation into SE Europe, sat Martell Crop Projections.