Nogger's Blog

06/06/11 -- EU grains closed lower with July London wheat down GBP2.50 at GBP192.50/tonne and with new crop Nov closing GBP3.50 easier at GBP189.50/tonne. Nov Paris wheat fell EUR6.50/tonne to EUR229.50/tonne whilst May12 was down EUR6.00/tonne to EUR232.50/tonne.

Decent weekend rains for France, and Germany, with more in the forecast over the next few days put the market under pressure. London wheat fell a bit more modestly as rains here were more scattered. Some lucky places in the south east got localised amounts of 30-50mm, but many others reported only 2-5mm.

How much good these rains will do at this stage is also a matter for debate. Whilst they certainly can't do any harm as far as head filling is concerned they aren't going to create any new tillers. Damage limitation is perhaps the name of the game from hereon in.

Reports circulating suggest that Russia has a significant volume of extra carryover wheat than official estimates reveal. It seems that growers there were maybe a little "over zealous" in their estimates on exactly how bad yields were in 2010 in an effort to gain maximum disaster compensation out of the government. This only seems to be coming to light now as long-holders look to liquidate stock now that the export ban has been lifted in an eleventh hour rush to make room for the impending harvest.

At home, what remaining UK wheat balances there are have few willing takers now that Ensus is out of the frame. From a feed compounder's point of view general demand is slack, and wheat is now a rather expensive raw material within that sluggish demand sector.

The USDA will report on corn and soybean planting progress later this evening, and also on that of spring wheat together with winter wheat crop conditions. Later in the week we have the WASDE report on Thursday, which may provide some fresh impetus.