London Wheat Closes At Highest Since June 2011

26/03/12 -- EU grains finished sharply higher with May 12 London wheat climbing GBP4.65/tonne to GBP177.15/tonne and May 12 Paris wheat up EUR3.25/tonne to EUR217.25/tonne.

This was the highest close for a front month for London wheat in nine months following another extremely warm and dry weekend that will only have heightened drought loss fears at home and on mainland Europe.

Shorts will be getting squeezed out by this sharp and unexpected rally from wheat.

Soybeans are closing in on USD14/bushel following continued crop write-downs in South America. Oil World now predict that world soybean production in 2011/12 will fall more than 20 MMT from last year.

The trade is now focusing on the USDA's March planting intentions report which comes out on Friday. The vibe for that is big corn acres, with spring conditions largely favourable for early planting, only a modest increase in soybean sowings and although wheat area will be up that it may fall short of the 58 million that the USDA said last month.

Before that DEFRA give us the revised S&D numbers for UK crop production for 2011/12 on Wednesday.