EU Grains Closing Comments

25/05/12 -- EU grains finished mostly higher with Jul 12 London wheat up GBP1.00/tonne to GBP175.00/tonne, Nov 12 London wheat was GBP1.50/onne higher at GBP159.50/tonne. Aug 12 Paris wheat was unchanged at EUR212.75/tonne, whilst Nov 12 was up EUR3.75/tonne to EUR216.50/tonne.

For Nov 12 Paris wheat this was the highest close on the weekly chart in almost 12 months.

On the week as a whole Nov 12 London wheat gained GBP1.50/tonne and Nov 12 Paris wheat EUR1.25/tonne.

Drought, particularly in Russia, Ukraine and the US is making the headlines and supporting the market.

The Euro was back under renewed pressure after Spain's fourth-largest bank, Bankia, asked the government there for a EUR19 billion bailout and said that it in fact made a EUR2.98 billion loss in 2011 rather than the EUR309 million profit it announced in February.

The weak euro should support wheat prices on the continent where the same warm and dry weather that we are currently experiencing in the UK is also prevailing in France and Germany. As with here, this should be largely beneficial to crops after a cool and wet April and early May, although it may not be too long before some are saying it's too hot and too dry here as well.

In the UK most crops are looking magnificent and appear to be growing before your eyes now that they finally have some much-needed heat units.

Corn planting in France is said to be 93% complete by FranceAgriMer, with emergence running at 76%.

Brussels only issued 84,0162 MT of soft wheat export licences this week as the marketing year end nears - the lowest volume in 14 weeks. That brings total year to date exports to a rather disappointing 11.85 MMT.

The US and much of Europe, including France and Germany, will be closed for a public holiday on Monday.

Point of interest: A year ago today drought talk was all the rage in the UK, France, Germany, Ukraine and Russia. The first winter barley was cut in the Charantes area of France on 24th May 2011, with resulting yields described at "catastrophic". Yields there finally averaged 5.7 MT/ha, around the same as here in the UK.