EU Wheat Ends Higher But Lacks Direction

08/05/12 -- EU grains finished higher with May 12 London wheat finishing up GBP2.50/tonne to GBP174.50/tonne, and new crop Nov 12 rising a more modest GBP0.45/tonne to close at GBP149.95/tonne. May 12 Paris wheat ended EUR0.25/tonne higher at EUR217.00/tonne, whilst Nov 12 was EUR3.25/tonne firmer at EUR198.00/tonne.

There seems to be little rhyme or reason to the markets at the moment, they are up for a day or two and then down for a day or two - it's been more than a month since May 12 London wheat closed outside the GBP170's.

These remaining old crop months are pretty illiquid though, new crop Nov 12 London wheat however does seem to be in a trend, and it's downwards, having closed at GBP163.50/tonne in late March. Nov 12 Paris wheat peaked at EUR208.25/tonne at the same time.

Fresh news is thin on the ground. Jordan bought 50,000 MT of optional origin wheat in a tender overnight. Tunisia bought 75,000 MT of wheat from an unspecified origin.

America's harvest is growing ever closer though and all the signs point to good, possibly even record, yields in some states. Spring wheat is also going into the ground in a very timely manner.

Meanwhile US corn planting is at its third fastest pace ever, maturity is massively above normal, 32% now as opposed to just 6% last year. This means that the crop is less likely to be at the crucial pollination stage at the height of the summer heat. It should also be less vulnerable to an early frost too.

The USDA will report on US and world production prospects for 2012 for the first time on Thursday. We've got used to being thrown a surprise or two in recent reports, few would bet against them doing the same again this time round.