EU Wheat Mostly Lower As Large US Harvest Looms

04/05/12 -- EU grains finished mostly lower with May 12 London wheat closing down GBP5.00/tonne at GBP172.00/tonne, and Nov 12 falling GBP1.85/tonne to GBP149.50/tonne. May 12 Paris market rose EUR2.50/tonne to EUR220.00/tonne and new crop Nov 12 fell EUR3.00/tonne to EUR195.75/tonne.

May 12 London wheat was down GBP6.50/tonne on the week, with new crop Nov 12 falling GBP6.10/tonne. Conversely May 12 Paris wheat rose EUR6.30/tonne compared with last Friday, whilst Nov 12 fell EUR7.00/tonne.

For May 12 London wheat this was the lowest close in more than three weeks, for new crop Nov 12 it was the lowest close since late February.

Paris rapeseed futures also fell hard, closing with losses of around EUR7-10/tonne on ideas that April rains and cooler temperatures have boosted Western Europe's chances of salvaging a decent crop this year and forecasts for similar conditions to move into Eastern Europe this weekend.

US wheat prospects are looking good with a sharp rebound in production in the top producing states of Kansas and Oklahoma on the cards. Crops are well forward too, with one report coming through today of harvesting having already started in Oklahoma 3-4 weeks ahead of schedule.

Both states are expected to have their biggest wheat crops since 2003.

US analytical firm Informa Economics today estimated the 2012 US winter wheat crop at 45 MMT, an increase of more than 10% on last year. In addition they pegged spring wheat plantings at 13.5 million acres, 1.5 million above the USDA's latest estimate.

Corn plantings in the US are also seen rising this year, to 96.1 million acres according to Informa which is 0.2 million more than the USDA most recently said.

Outside markets were also a bearish influence, with Brent crude falling through key support levels and US oil shedding more than 4% on the day to trade below USD100/barrel for the first time since February. The euro slumped to its lowest levels against the pound since June 2010 ahead of nervousness ahead of weekend elections in France and Greece.