Nogger's Blog

15/04/11 -- May London wheat closed GBP0.75/tonne lower at GBP207.00/tonne with new crop Nov down GBP1.00 to GBP164.50/tonne. May Paris wheat was up EUR0.50/tonne at EUR238.25/tonne whilst Nov was down EUR0.25/tonne to EUR208.00/tonne.

London wheat was under pressure from a combination of factors including a firmer pound and ideas that old crop is overpriced relative to French wheat, May's close at GBP207.00/tonne is the equivalent of around EUR234.00/tonne, little more than four euros underneath where the better quality Paris contract closed.

Front month May in London is clearly getting technical in a relatively illiquid market, running at a GBP3.00/tonne front-end premium to July.

The Nov London/Paris differential is around a more ample EUR22.00/tonne.

Brussels issued 198,000 MT of soft wheat export licences this past week, bringing the year to dat total to 15.9 MMT, 13% up on year ago levels. That's the lowest weekly figure in the last nine weeks.

In the UK the weather is seen turning a little cooler and wetter, although with these weather fronts moving in from the west how much rain manages to make it's way into eastern counties is questionable.

There's some rain relief ahead for HRW wheat areas in Kansas, improving crop prospects there. The crop maybe isn't looking quite as bad as you might imagine judging on these pictures posted on Twitter yesterday: Hutchison, Kansas and Pratt, Kansas.

Ukraine are gearing up to double their grain exports in 2011/12, according to local analytical firm UkrAgroConsult, and there is a growing feeling that Russia may not be absent from the export arena for as long as had originally been thought.

Meanwhile, wheat production in Kazakhstan is forecast by FAO at around 16 MMT this year, 60% above the 2010 level of 10 MMT.

On the week as a whole May London wheat managed to finish slightly higher, up GBP0.25/tonne whereas Nov fell GBP5.00/tonne. May Paris wheat fell EUR9.00/tonne and Nov lost EUR7.00/tonne.