EU Wheat Closing Comments - Friday

Posted by Nogger - a legend in his own mind at 09:39 | Categorized as

20/07/12 -- EU grains finished mostly higher with Nov 12 London wheat up GBP0.50/tonne to GBP194.50/tonne and Nov 12 Paris wheat EUR2.25/tonne firmer at EUR269.50/tonne.

For the week as a whole Nov 12 London wheat was GBP6.50/tonne higher, whilst Nov 12 Paris wheat gained EUR10.75/tonne.

The wheat market continues to press higher after another week of punishment was dished out to US crops that saw both soybeans and corn post record highs.

A sharp fall in wheat production in Russia, Kazakhstan and Ukraine this year should make it easier for EU and US grain to make it into North Africa. The weakness of the euro will also help, with the pound rising above 1.128 against the single currency, a level not seen since 2008.

Not that that will help UK exports, but the market is the market, and it currently says that feed wheat for next Jul 2013 is worth GBP200.50/tonne.

In round figures that's around EUR257.50/tonne, which is not much more than Friday's closing price for May 13 Paris wheat of EUR264.50/tonne - the latter of course being for milling wheat - something that should indeed be in short supply in the UK this year.

Toepfer increased their estimate for the German wheat crop slightly to 23.18 MMT from 22.71 MMT previously due to plenty of rain in the past few months.

Ukraine's wheat production problems, which started with a very dry last autumn, and spread into increased winterkill appear also to have rubbed off on corn production too - with output now no longer expected to top last year's record crop.