EU Wheat Close

03/05/12 -- EU grains finished mostly lower. Technical May 12 London wheat finished up GBP2.75/tonne at GBP177.00/tonne, making it now a curious GBP5.50/tonne premium to July. The more liquid new crop Nov 12 fell GBP2.40/tonne to close at GBP151.35/tonne. May 12 Paris wheat ended EUR0.25/tonne lower at EUR217.50/tonne, whilst Nov 12 was EUR3.00/tonne weaker at EUR198.75/tonne.

Frankly, London wheat is becoming more and more of a joke, having less correlation to the physical market than ever. It remains to be seen how much longer this charade can carry on for with a new Black Sea wheat future set to begin trading next month.

FranceAgriMer say that the soft wheat crop there is now rated 65% good/excellent, up two percentage points on a week following plentiful April rains.

Brussels issued 164TMT of soft wheat export licences this week, down by more than a quarter on last week.

With only 8 weeks to go to the end of the marketing year, EU-27 soft wheat exports are down by almost a third on year ago levels, a situation unlikely to improve given current unadvantageous pricing structures.

The Ukraine Ag Ministry said that Ukraine exported 17.8 MMT of grains from July 1st through to May 3rd, an 80% increase on a year ago. They also added that they will export 2.0-2.2 MMT/month in May-Jun, bringing the entire 2011/12 marketing year exports to around 22 MMT.

The UN's Food and Agriculture Organisation say that world wheat production in the coming season will come in at 675 MMT, 3.6% down on last year but broadly in line with other estimates from the likes of the IGC who said 676 MMT late last month.