Old Crop EU Wheat Higher, New Crop Lower (Again)

Posted by Nogger - a legend in his own mind at 18:59 | Categorized as

16/04/12 -- EU grains finished mixed but mostly lower. May 12 London wheat rose GBP0.85/tonne to GBP176.50/tonne but new crop months were GBP1.20/tonne to GBP 2.05/tonne lower. May 12 Paris wheat was EUR0.25/tonne higher at EUR209.25/tonne, new crop was EUR2.25 to 2.75/tonne lower.

Old crop London wheat is clearly outperforming, continuing to widen the gap between it and new crop. A week ago the May 12/Nov 12 spread was GBP14.70/tonne and today it's GBP23.65/tonne, almost a GBP9.00/tonne difference in a week.

For the month of April so far May 12 London wheat has gained GBP1.75/tonne whilst Nov 12 has lost GBP8.85/tonne. Based on tonight's close May 12 London wheat is worth around EUR4.30/tonne more than the same position in Paris.

The pound rose to it's highest levels against the euro since September 2010 today on heightened concerns over Spanish debt.

French crop conditions from FranceAgriMer suggest that the winter wheat crop is now rated 62% good/excellent versus 75% last year, winter barley is similarly rated 55% compared to 77% in 2011, whilst the durum crop is in an even worse state at 42% good/excellent against 71% this time last year.

The USDA were due to announce spring planting progress and winter wheat crop conditions tonight, but it seems that this report may be delayed until tomorrow due to a technical problem. The market is expecting corn plantings to have raced to a record 20% done as of Sunday night, with spring wheat sowings progressing to a huge 50% complete. Widespread weekend rains and more of the same is seen boosting early spring crop development.

Russian railway operator Rusagrotrans say that Russian grain exports as of the end of March stood at 22.3 MMT for the current marketing year. Ukraine's stood at 15.3 MMT and Kazakhstan's at 7.7 MMT, they added. Full 2011/12 marketing year (July/June) exports are seen at 25.7 MMT from Russia, with Ukraine at 21.0 MMT and Kazakhstan at 12.5 MMT, they estimate.

Morocco bought 180,000 MT of wheat of unknown origin and Libya bought 30,000 MT of Russian wheat in various weekend tenders.