Nogger's Blog

14/02/12 -- EU grains finished higher with Mar 12 London wheat ending up GBP0.50/tonne to GBP164.00/tonne and Mar 12 Paris wheat climbing EUR4.25/tonne to EUR211.00/tonne. New crop London wheat was GBP2.75/tonne higher, yet Nov 12 Paris wheat was only EUR0.25/tonne firmer.

Clearly EU wheat didn't know what to do today. Rising Chicago wheat should be supportive, you'd have thought, but indications that European wheat is too expensive relative to American wheat isn't helpful.

News that Australia's equivalent of the HGCA, ABARES, had increased the size of the 2011/12 wheat crop there to a record 29.5 MMT was hardly friendly. Wheat exports are also pegged at a record 22.3 MMT, 1.8 MMT higher than the USDA predicted last week, and also an all-time high.

Winterkill doubts still linger though following the recent cold snap across Europe.

"The so far the mild winter prevented winter cereals partially from hardening and they were vulnerable to frost kill damage in western Europe but also in western Poland, Czech Republic and around the Black Sea.

"Frost kill due to the current cold spell is very likely to occur in eastern France, the Benelux countries, Germany, Poland and Czech Republic as well as in Ukraine," say EU research centre MARS.

Elsewhere doubts remain over Greece's commitment to the recently announced "done deal" on austerity, especially in the light of April elections immediately following the next tranche of bailout money due next month.