The Morning Vibe And 2012 Predictions

Posted by Nogger - a legend in his own mind at 10:15 | Categorized as

28/12/11 -- That's another bout of rampant festive consumerism over and done with I'm pleased to report. There's just enough time left to pop down to the sales before we start planning our 2012 summer holidays. Before that there's New Year, Valentines Day, Easter and the Queen's Jubilee Wotsit to get over. I don't know how we are going to fit it all in to be honest. We might not get chance to watch the Christmas Dr Who on catch-up until August at this rate.

So, what's been going on besides Bates getting sent down and Lady Mary coming clean about that dead Turk that was found in her bed in Downton Abbey? Quite a lot actually.

The Septics and the Frogs were both open for business yesterday, with Jan 12 Paris wheat finishing EUR2.00/tonne higher and adding another EUR2.75/tonne to that so far this morning. Paris rapeseed was EUR4.00/tonne higher yesterday, enthused by Chicago soybeans rising around 35-37 cents last night.

As you might have guessed by now, the market is calling the holiday weekend rains "disappointing" in South America.

Chicago wheat was around 20-22 cents firmer last night and corn up 13-14 cents on old crop months.

As mentioned on Friday, which seems like a very long time ago now, it is interesting to note that Chicago wheat has risen more than corn or beans in this recent rally despite this weather issue being by far potentially the least damaging for wheat. This is clearly down to the large fund short that has been in place for some time now.

Fears over European debt seem to have put on the back burner, at least for now.

So where are we heading from here? New Year is after all a time for predictions. I'm tempted to suggest that we may be going modestly higher on UK wheat for the first quarter of 2012, with the market maybe likely to peak around March/April at say GBP160.00/tonne.

After that, barring of course an unpredictable weather disaster, I think that the only way is down.

Flicking through old records and charts over the Christmas break I noted that in 22 of the last 28 years London wheat has peaked during the first half of the calendar year, so those hoping for a back-end rally are backing the 4/1 outsider in a two horse race.

For the low of 2012 I'll plump for GBP120-125/tonne to occur around September.

If you're interested this time last year I went for "London wheat peaking around May at GBP225-230/tonne," which wasn't too far off the mark with the high of the year of GBP217.50/tonne set on April 20th.