New Crop Paris Wheat Jumps To 11-Month Highs

Posted by Nogger - a legend in his own mind at 09:54 | Categorized as

18/05/12 -- EU grains finished higher with May 12 London wheat ending up GBP1.00/tonne at GBP175.00/tonne, new crop Nov 12 was GBP5.00/tonne higher to GBP158.80/tone. Nov 12 Paris wheat was up EUR8.25/tonne to EUR215.25/tonne.

On the week as a whole May 12 London wheat gained GBP2.50/tonne whilst Nov 12 added an impressive GBP10.60/tonne to close at its highest in more than six weeks. Nov 12 Paris wheat was EUR19.00/tonne higher on the week, closing at it's best levels in eleven months.

The second successive sharp monthly reduction to EU-27 wheat production prospects from Strategie Grains, and talk of potentially serious problems developing for Russian wheat unless rain arrives soon, were behind this week's rises.

Winter kill losses in France, Germany and Poland are said to have been heavier than realised, according to Strategie Grains. What has survived the winter appears to be in decent shape in France at least where FranceAgriMer now rate 67% of the wheat crop in good/excellent condition, up from 65% a week ago.

Wheat appears to have done a exceptionally good job of shrugging off outside market influences this week, with Brent and NYMEX crude both slumping to their lowest levels of the year so far on the back of the ongoing European debt crisis.

Euro weakness is seen remaining, which should at least help to support Paris wheat. Soft wheat exports out of Rouen more than doubled to 123,400 MT this week, helped by shipments of more that 75,000 MT to Algeria.

Chicago wheat gained more than a dollar a bushel, around 17%, this week - way outperforming corn and soybeans. Dryness concerns also exist here, particularly in the top producing state of Kansas where the USDA cut good/excellent ratings by eight percentage points on Monday.