Old Crop London Wheat Relinquishes Most Of It's Weekly Gains

20/04/12 -- EU grains finished mixed with May 12 London wheat down a GBP2.20/tonne to GBP176.30/tonne, whilst new crop Nov 12 fell GBP0.30/tonne to close at GBP154.70/tonne. May 12 Paris wheat ended EUR0.25/tonne lower at EUR216.50/tonne, Nov 12 was EUR0.75/tonne firmer at EUR203.00/tonne. On the week overall May 12 London gave up most of its gains to close just GBP0.65/tonne higher, Nov 12 was also GBP0.65/tonne higher on the week. May 12 Paris wheat gained EUR7.50/tonne.

Having ended last week at around EUR3.00/tonne premium to Paris wheat, May 12 London wheat closed at around a EUR2.00/tonne discount. Still not very much traditionally.

So has old crop London wheat topped? What we do know is that it did exactly that on this day twelve months ago.

It's rained every day since the Environment Agency announced that the UK drought could last until Christmas. In fact the Telegraph reported on Wednesday that wet weather will continue to the end of this month potentially making it one of the wettest Aprils on record.

The sudden change in conditions is also being replicated on the continent with France and Germany now picking up much needed moisture, and with plenty more in the forecast through into May.

Crop prospects are also said to have improved in Ukraine, where UkrAgroConsult are now forecasting 2012/13 grain exports rising to 22-24 MMT from 19-20 MMT this season. Corn exports will jump to 14-15 MMT next season, making them the world's largest supplier of the grain after America.

The latest data from Brussels has the EU-27 exporting 13 MMT of all wheat & wheat flour 42 weeks into the 2011/12 marketing campaign. That puts us on course to fall short of the USDA's current target for the full marketing year of 17 MMT by around 1 MMT.

Across the pond, old crop Chicago corn closed the week almost 17 cents lower, depressed by the lack of confirmation from the USDA of the widely rumoured volume sales to China. Meanwhile, near ideal Midwest spring planting conditions are seeing corn go into the ground at a rapid pace.