London Wheat Slips From Highs

23/10/12 -- EU wheat ended mixed Tuesday with Nov 12 London wheat down GBP1.50/tonne to GBP204.50/tonne and with Nov 12 Paris wheat down EUR0.50/tonne to EUR262.50/tonne.

In early morning trade the pound had fallen as low as 1.2250 against a broadly firmer single currency, it hasn't been below 1.22 since the first day of May.

There are plenty of concerns around regarding the state of wheat prospects around the world to keep the market underpinned as we head into winter it would seem.

At home in Europe the wet, dank and grey summer has given way to a wet, dank and grey autumn with similar winter around the corner it appears. Planting conditions in the UK, western Germany and France are far from ideal which is supporting new crop months.

Australia's wheat production estimate of 23 MMT from the USDA is 3 MMT too high, according to the Australia New Zealand Bank.

US winter wheat sowings are in line with normal at 81% done, but what has been sown desperately needs rain, and there's precious little in the forecast.

"Showers are developing today in southwest Oklahoma. Later this week on Thursday-Friday another weather disturbance is expected to produce welcome rain and wet snow on the High Plains wheat growing area in Colorado and Nebraska. Kansas - the leading US wheat state - is not expecting meaningful precipitation this week. Soil profiles are still dry from severe drought last summer in the Great Plains. Very heavy rain would be required to replenish the deep soil layer," say Martell Crop Projections.

Ukraine's early season exports are tearing along, up 73% year-on-year, at 7.65 MMT, of which 3.82 MMT is wheat, according to the Ministry there. The say that wheat exports will be finished by around 15-20 November.

French wheat exports are expected to pick up sharply in the second half of the season as Black Sea supplies run dry. FranceAgriMer predict French wheat stocks may decline to only 1.8 MMT by mid -2013, the lowest carryover since record keeping began in the late 1990s, add Martell Crop Projections.