Nogger's Blog

19/04/11 -- May London wheat closed GBP4.50/tonne higher at GBP217.00/tonne with new crop Nov up GBP3.35 to GBP174.10/tonne. May Paris wheat was up EUR5.25/tonne at EUR251.25/tonne whilst Nov was EUR6.50/tonne higher to EUR223.50/tonne.

This was another highest close ever for a front month in London, the second in a row. Unseasonably warm and dry weather is what is getting the market all hot under the collar today, although it has to be said that driving round the north of England today things are looking more like a green and pleasant land than a disaster zone.

Things are reported to be worse in northern France and Germany however. German analysts DRV today dropped their 2011 wheat production estimate to 24.58 MMT even so that's more than a million tonnes up on last year. It also dropped it's barley forecast to 8.9 MMT (9.8 MMT in 2010) and it's rapeseed estimate to 5.2 MMT (5.1 MMT last year).

The market was in catch-up mode following sharp gains in US wheat futures overnight and again this morning. Some unsubstantiated reports suggest that new crop UK feed wheat may have been sold to the US in the past day or two.

With US corn prices also posting record highs and stocks dwindling, it's possible, although the levels being mooted are around GBP10.00/tonne below replacement on the current market.

The USDA left the proportion of the US winter wheat crop rated good/excellent unchanged last night, they did however increase the proportion of the crop rated poor/very poor by two percentage points.

Whilst US corn sowing are lagging, and spring wheat planting set back by cold, floods and snow further north, Russian spring grain seedings are also running at more than 50% behind year ago levels.