EU Wheat Higher, Aided By Large US Corn Sales To China

27/04/12 -- EU grains finished mostly higher with May 12 London wheat up GBP1.10/tonne to GBP178.50/tonne and Nov 12 up GBP1.95/tonne to GBP155.60/tonne. May 12 Paris wheat was EUR2.75/tonne higher at EUR213.70/tonne, new crop Nov 12 was up EUR2.25/tonne to EUR202.75/tonne.

For the week overall May 12 London wheat was GBP2.20/tonne higher, whilst Nov 12 was up GBP1.10/tonne. Conversely May 12 Paris wheat lost EUR2.80/tonne, with new crop Nov 12 down a nominal EUR0.25/tonne.

London wheat seems determined to attempt to continue to punch above its weight, with May 12 now around a EUR5.00/tonne premium to its Paris counterpart.

Reports continue to circulate that the drought has not yet been broken in Eastern Europe. In stark contrast the BBC report that April rainfall in England has been 165% of normal so far this month, with Wales at 130% and Scotland 121%.

The HGCA say that following the rain, the condition of winter wheat and barley here is very good.

Finally igniting what had been a lacklustre US corn market so far this week was the USDA confirming 1.56 MMT of US corn sold to China/unknown. That is apparently the largest one day corn sale since 1991, and would appear to finally back up last week's reports of heavy Chinese interest.

I wonder if they will back up this week's widely touted reports of significant soybean sales to the same buyer next week?

FranceAgriMer report that winter wheat crop conditions there improved slightly this week to 63% good excellent compared to 62% a week previously.

New crop Paris rapeseed was up around EUR4.00-5.00/tonne today following a Reuters report that Strategie Grains are now predicting an EU-27 crop of just 17.6 MMT this year. That would be almost 8% down on last year and represents a six year low.