Nogger's Blog

12/04/11 -- EU grains closed with May London wheat down GBP1.00/tonne to GBP208.50/tonne and with new crop Nov falling GBP2.25 to GBP167.25/tonne. May Paris wheat fell sharply, EUR8.00/tonne down to EUR240.25/tonne and Nov was down EUR8.75/tonne at EUR208.50/tonne.

London wheat attempted to paddle it's own canoe early on, trading slightly higher for most of the morning, but eventually found the tide too strong to swim against.

A weak sterling helped London to fare much better than Paris wheat today, with UK retail sales for March falling the most since records began in 1996 and a surprise drop in inflation last month (making an imminent interest rate hike less likely) putting the pound under pressure.

An escalation of the Japanese nuclear disaster and a note from Goldman Sachs recommending clients book profits and exit longs in commodities encouraged traders to take some money off the table.

Crude oil fell around USD3-4/barrel and gold and other metals were sharply lower.

Chicago opened on the back foot and quickly retreated further, adding to European losses late in the session. London's close was positively buoyant in comparison, which may mean further losses in the morning.

In the UK feed manufacturers don't want wheat at this sort of money, it's simply too expensive. One large UK grain merchant said to me the other day "if the (futures) market wants it, the market can have it." Indicating that physical buyers are few and far between at levels now well in excess of GBP200/tonne again.

Pairs wheat fell around EUR10/tonne on the day with corn falling in the region of EUR5/tonne.