London Wheat Presses On To Further All-Time Highs

06/11/12 --  EU wheat closed higher once more, with Nov 12 London wheat pressing on to a fresh contract closing high of  GBP217.25/tonne up  GBP2.25/tonne on the day. New crop Nov 13 closed GBP1.25/tonne firmer at a contract high GBP192.25/tonne.

London wheat continues to push on to historic all-time highs on concerns over old crop quality and diminishing new crop prospects.

May 13 set another record high trading price for any London wheat month ever of GBP225.00/tonne, whilst new crop Nov 13 homed in on GBP200.00/tonne hitting a lifetime contract high of GBP193.00/tonne.

Black Sea tightness appeared to be confirmed by a J P Morgan forecast featured in the FT that said Russia/Ukraine would only ship 1.7 MMT of wheat between them in the Dec/Jun period, an astonishingly low volume and 85% lower than in the same period in 2011/12.

To underline Black Sea constriction, Kazakhstan's Ministry said that they have only harvested 14.72 MMT of grains on bunker weight this year, down more than 50% on 29.7 MMT on last year.

Grain exports this year from the frequently drought-plagued country will only total 7 MMT, down nearly 42% on last season's 12 MMT, according to the local Grain Union.

US winter wheat conditions, already at their worst in more than 27 years continue to deteriorate.

"The (Monday) USDA crop progress report indicated worsening conditions in wheat. Nineteen percent of winter wheat rated poor-very poor, 42% fair, and 39% good-excellent. This is step down from a week ago when winter wheat was 15% was poor-very poor, 45% fair, and 40% good-excellent," say Martell Crop Projections.

"Kansas received no rain at all last week, the United States top wheat state. Drought worsened significantly in October. Growers reported topsoil moisture at 73% short-very short, 27% adequate and 0 percent surplus. That’s drier even than 2 years ago in another severe drought, when topsoil moisture was 67% short-very short, 33% adequate and 0% surplus early in November," they add.