Nogger's Blog

02/06/11 -- EU wheat futures closed mostly higher with Jul London wheat up GBP3.45/tonne to GBP195.45/tonne and with new crop Nov rising GBP3.80/tonne to GBP191.45/tonne. Nov Paris wheat was up EUR1.25/tonne to EUR237.50/tonne whilst May12 rose EUR1.50/tonne to EUR239.75/tonne.

It was a bit of a mini recovery after a few days of losses since Russia announced the lifting of it's export embargo. Interestingly since then we've seen Nov Paris wheat fall 4.7% yet Nov London wheat has only declined by a more modest 2.6%.

Ukraine intriguingly lowered their 2011/12 grain export estimate from 19-20 MMT to 15-18 MMT, despite having plenty of carryover old crop stocks and a potentially bumper 2011 harvest only a few weeks away.

The trade is debating whether new crop prospects are as rosy as the Ministry there insist, or indeed whether they are actively trying to understate their potential for next season in the hope of shoring up prices a little.

Politics also seem to be at work across the border in Russia. Trade talk suggests that the rapid domestic price increases that they've seen since the ban was lifted may herald the imposition of some sort or quota system, or even the introduction of export tariffs.

The trade awaits the results of assorted international tenders kicking around from the Middle East and North Africa to gauge just how cheap the Black Sea is going to be relative to EU/US wheat.

It was a hot day across much of the UK today with the mercury hitting 26C in Poole. That may have caused further yield loss potential in the SE areas that didn't get much in the way of rain over the past fortnight.