EU Wheat Mixed But Mostly Higher

14/03/12 -- EU grains finished mixed but mostly higher. Mar 12 London wheat was up GBP2.00/tonne at GBP168.50/tonne, other old crop months were GBP1.50/tonne firmer with new crop mostly up GBP1.00/tonne. May 12 Paris wheat was down EUR0.75/tonne to EUR210.75/tonne.

This was the highest close for a front month in London wheat for 27 sessions, yet back then front month Paris wheat was over EUR10.00/tonne higher than it is now at EUR221.50/tonne.

In London wheat we have Nov 12 running at a GBP15.50/tonne discount to May 12, in Paris that difference is EUR11.50/tonne (ie around GBP9.50). That suggests that either May 12 London wheat is too dear or Nov 12 is too cheap.

With May 12 London feed wheat only around EUR6.00/tonne under it's Parisian milling wheat counterpart it is interesting to note that Nov 12 is around EUR13.00/tonne under.

All of the above seems to indicate that old crop UK values are too high. It is interesting to note that yesterday's export figures show UK exports falling by almost a third in January despite the inclusion of a large high profile shipment to the US. That would also seem to lend support to this notion.

FranceAgriMer made some minor adjustments to the 2011/12 supply & demand balance sheets there, the most significant of which was probably an increase in corn ending stocks of 0.3 MMT to 2.2 MMT. Wheat ending stocks for 2011/12 are seen at 2.4 MMT, with the barley carryout at 1.1 MMT.

The Scottish government said that winter wheat plantings north of the border are down 13.6% on last year at just over 98.6 thousand hectares. Barley, OSR and oat plantings are also said to be down on last year due to the very wet autumn.

Rabobank estimate EU winter wheat losses due to winterkill at "around 1 MMT" which is probably no worse than normal and significantly better than Agritel's estimate of a reduction of 1.9 MMT in France alone.

In the US warm and wet is the order of the day for much of the central and southern Great Plains, which should aid winter wheat conditions which are already substantially better than they were at this time last year.