EU Grains Close

10/05/11 -- May London wheat closed GBP2.75/tonne higher at GBP205.50/tonne with new crop Nov up GBP1.25 to GBP179.00/tonne. May Paris wheat fell EUR2.75/tonne to EUR265.00/tonne whilst Nov was up EUR2.75/tonne to EUR228.00/tonne.

May Paris wheat went off the board today, whilst May London wheat is still with us for almost another fortnight. With July London wheat ending at GBP196.50/tonne we've got a hefty GBP9.00/tonne premium for nearby opening up, where dark satanic forces seem to be at work.

That differential doesn't translate into the physical market however where July is still around a GBP2.00/tonne premium to May.

European weather concerns remain, although the BBC are giving heavy rain showers for northern France on Saturday and more scattered lighter showers for much of Germany this side of the weekend.

Most parts of the UK continue to see spotty showers, although peak wheat production areas in the SE are faring the worst.

Trade speculation puts wheat yield losses in the UK at around 10% with France and Germany likely to have suffered to the tune of 15-20%. That potentially pegs UK wheat production this season at around 14.4 MMT, with output in France at 31-33 MMT and Germany falling to around 20-21 MMT.

In round figures that's in the region of 10-14 MMT knocked off EU-27 production from the three leading producers in the bloc, and that's before we take Europe's fourth largest producer Poland into account where things are also looking far from rosy.