Nogger's Blog

05/03/12 -- EU grains finished higher with front month Mar 12 London wheat up GBP1.20/tonne to GBP166.50/tonne and Mar 12 Paris wheat EUR3.50/tonne firmer to EUR220.50/tonne.

The market shrugged off the news that China's PM had warned that "the road to global economic recovery will be tortuous," reducing his estimate on growth there to 7.5%. Whilst that's more than respectable by most standards, but it would be the lowest for China since 2004.

Still, undeterred Paris wheat managed to close higher for a fifth session in a row. The premium between March and May continues to widen, ending at EUR9.25/tonne tonight, a week ago that was only EUR4.00/tonne. That may be technical as the former goes off the board a week today when May becomes the sole remaining old crop month.

March London wheat has almost three weeks to go before it expires. Given the very small open interest in that position, it is maybe not surprising that it didn't trade at all today. Most active May closed GBP0.60/tonne firmer at GBP167.80/tonne.

Reports that Morocco, a regular buyer of French wheat, is likely to be in the market to import 1 MMT by the end of May was supportive for Paris. A dry winter is also likely to have a negative impact on wheat production there this year further boosting the need for imports, according to Agritel.

Northern Central America is picking up some much needed moisture, say Martell Crop Projections. "Corn producers in Minnesota and South Dakota also are feeling better about corn planting following a serious of winter storms that have increased ground moisture," they add.

The Ukraine Ag Ministry have lowered their 2011/12 grain export projection a little to 25.4 MMT from 26 MMT previously. Having only exported just over 13 MMT in the first two thirds of the marketing year, that means they'll have to shift almost the same volume again in the remaining four months of the marketing year. A tall, and pretty unlikely order.