Nogger's Blog

18/04/12 -- EU grains finished mixed with May 12 London wheat closing GBP1.55/tonne higher at GBP178.00/tonne, but with new crop months GBP0.50-1.50/tonne easier. May 12 Paris wheat rose EUR3.00/tonne to EUR214.75/tonne, new crop months showed only modest gains.

The London old crop/new crop spread continues to widen, with the May/Nov differential now at GBP25.00/tonne it is almost double the GBP13.05/tonne it began the month with. Old crop London wheat also curiously remains at a premium to Paris wheat.

Nearby London wheat rose despite the pound climbing above 1.22 against the euro for the first time since August 2010 after the release of the minutes of the Bank of England's April meeting showed less chance of further QE.

Concern over Spanish debt is also weighing heavily on the Eurozone.

Widespread rains across much of the UK should be easing drought fears. Rain is also on the cards for much of France and Germany today and later this week, bringing relief to crops stressed by winter drought.

The current huge low over Ireland is dominating events and producing plenty of widespread rain all over Europe. When that low finally weakens next week another large one moves in to replace it, keeping things cool and wet for the rest of the month, say WXRisk.com.

Some European crop production forecasts have already being downgraded though.

German farm group DRV today pegged soft wheat production there at 20.9 MMT, 1.8 MMT down on last year and around 1.5 MMT below other trade estimates. They've also reduced their rapeseed production estimate to 4.32 MMT, which again is around half a million under other numbers in the market.

Meanwhile, Spain's agriculture ministry forecasts that the winter grain harvest there will fall by 24.6% this year.