Nogger's Blog

24/05/11 -- EU wheat futures closed lower with Jul London wheat down GBP3.50/tonne to GBP192.00/tonne and with new crop Nov falling GBP2.15/tonne to GBP191.35/tonne. Nov Paris wheat was down EUR3.50/tonne to EUR241.00/tonne whilst May12 declined EUR3.50/tonne higher at EUR241.50/tonne.

Paris corn was mostly around EUR0.50-1.50 lower, with rapeseed futures rising around EUR1.00-2.00/tonne and malting barley up a euro nearby to as much as EUR9.25/tonne further forward.

New front month July London wheat posted the lowest close for a front month since Mar 17th. Back then wheat was on it's way back up from the 2011 low of EUR167.35/tonne - set a couple of days earlier in the immediate aftermath of the Japanese earthquake and subsequent tsunami and nuclear crisis.

India - the world's second largest wheat producer - say that they will harvest a record amount of wheat this year, possibly in excess of 86 MMT, which may open the door for some sizable exports. The government there say that local wheat procurement is well ahead of last season.

The authorities there have come in for heavy criticism in the past few years for allowing bumper wheat stocks to rot in inadequate storage facilities rather than allow the grain to go for export. With international wheat prices where they are now the government may decide that it would be foolish to continue to look a gift horse in the mouth.

"Russian spring grain planting is moving rapidly ahead under dry conditions, warmth in May is perfect for spurring fast planting in Black Earth and Volga districts," say Martell Crop Projections.

UkrAgroConsult estimate 2011/12 wheat production in Ukraine now at 20.4 MMT, down slightly from the previous forecast of 20.5 MMT, but an increase 18.6 MMT on the previous year. Exports are estimated at 10.0 MMT, an increase of over 150% on the current season. They aren't likely to be too tardy in getting started with those either.