London Wheat Close

01/05/12 -- EU grains finished lower with May 12 London wheat closing down GBP2.25/tonne at GBP176.50/tonne, and Nov 12 falling GBP0.85/tonne to GBP155.15/tonne. The Paris market was closed for the May Day holiday.

With Paris and much of the continent, including the Black Sea, out of action there was little going on today.

The USDA last night said that US farmers planted a quarter of the anticipated 2012 corn acreage in just a week as of Sunday night. Planting is already past the halfway point at 53% done versus only 27% normally. Emergence is 15% compared to 6% normally.

There's a long way to the finishing post yet, but the crop has clearly been given the best possible start.

In addition spring wheat plantings are more than double their normal rate at 74% complete and emergence is 30% versus only 8% for the five year average.

Winter wheat crop conditions improved slightly from last week to 64% good/excellent (compared to just 34% a year ago). Maturity of the crop is also well advanced at 54% headed compared to 24% on average.

The USDA attaché in Romania said that widespread damage to the winter rapeseed crop there will see an increase in corn acres this spring, a situation that is likely to be replicated in many parts of Eastern Europe. Romania's wheat and barley output are also both seen around 10% lower this year.

In Western Europe the drought may finally be broken but April rains have arrived late enough to see Spain's corn plantings fall by more than 15% this spring, according to the Ag Ministry there. Durum wheat production in the south of the country is likely to take a significant hit, although rain in the north over the past month should alleviate some damage to the wheat and barley crops there.

For the UK and France the old adage "rain makes grain" will be tested this year, with some crop reports already saying that there's been no crop damage "yet". The Met Office say that the UK's April rainfall total was the wettest on records which date back to 1910, surpassing even the previous record of 120.3mm set in 2000.

Out of interest rain did indeed make grain in 2000 as we ended up with our second highest wheat crop ever. The record high production year of 2008 was also dogged by persistent rains that led to some fields not getting harvested until October.