New Crop London Wheat Sets Lifetime Contract High

22/10/12 -- EU grains closed mostly higher on the day with Nov 12 London wheat up GBP1.75/tonne to GBP206.00/tonne whilst Nov 12 Paris wheat was EUR0.25/tonne firmer at EUR263.00/tonne.

Catching the eye was Nov 13 London wheat closing up GBP3.75/tonne at GBP182.50/tonne, setting a fresh closing high for the contract's lifetime, as the trade already starts to get anxious about prospects for next year's crop.

There are concerns that the recent excessively wet conditions might cause some problems in France too, where northern and western areas have received 5-8 inches of rain over the past thirty days - two to three times the normal volume for this time of year.

French winter wheat plantings are only 20% done according to FranceAgriMer, a year ago they were past the halfway point at this time.

Vivergo appear to be gearing up for their scheduled opening around the turn of the year, as they are apparently offering their distillers grain by-product into the market for Feb/Apr 2013, I hear.

Ensus recently said that they would be prepared to take UK wheat down to 60kg/hl bushel weight following this year's crop disaster (subject to seeing how well such wheat actually performs). Vivergo will no doubt also be pondering their stance on this issue.

The EU Commission's MARS unit made minor tweaks to last month's yield estimates today, with small rises for corn, barley and OSR and a small decrease for wheat. They put 2012 EU-27 corn yields at 6.07 MT/ha, 20.6% down on last year and 12.6% below the 5-year average. Wheat yields were said to have averaged 5.25 MT/ha, 2.5% down on last year and 1.2% below average. Barley yields were pegged little changed from a year ago or the 5-year average at 4.34 MT/ha, whilst OSR yields were estimated 6% up on last season at 3.03 MT/ha.

UK wheat yields still look way to high versus other trade estimates at 7.35 MT/ha. Barley yields here were forecast at 5.72 MT/ha and OSR yields at 3.48 MT/ha, a little above Defra, but not startlingly so.

The trade seems a little less certain today that Ukraine has introduced a Nov 15 wheat export ban than it was on Friday. What is reported is that they have already exported 7.1 MMT of grains, of which 3.6 MMT is wheat, and that they have a further 1.8 MMT of wheat contracted to ship. That takes them well over the agreed 5 MMT voluntary ceiling anyway, so suffice to say that they are out of the wheat export market until new crop.

Russia say that their grain harvest is just about over, producing 39.5 MMT of wheat at an average yield of 1.86 MT/ha, 21% down on last year.