Nogger's Blog

12/04/13 -- EU wheat closed mixed with May 13 London wheat down GBP1.35/tonne at GBP197.75/tonne and with new crop Nov 13 up GBP0.40/tonne to GBP187.15/tonne. May 13 Paris wheat settled EUR4.00/tonne higher at EUR249.50/tonne.

For the week this puts May 13 London wheat down GBP0.85/tonne, with Nov 13 up GBP2.90/tonne and May 13 Paris wheat EUR5.75/tonne firmer.

Exactly why the two front months moved in such opposite directions I'm not so sure. Certainly it had nothing to do with currency movements as the pound was little changed against either the euro or the dollar on the day. Perhaps it's more to do with slumping UK exports, rising imports and stagnant demand amidst the closure of Ensus?

Customs data shows that the UK exported only 17,800 MT of wheat in February, the lowest monthly total on record. The marketing year to date total is now 548 TMT, down 74% on last season. Wheat imports in February meanwhile were 256 TMT, taking the 2012/13 total so far to 1.86 MMT, a rise of 210% on 2011/12. Corn imports are also sharply higher year on year, up 70% to 1.11 MMT.

French winter wheat rated good/excellent fell one percentage point this week to 65%, a figure still comparable with last year. Winter barley conditions are better than last year's 57% good/excellent, also at 65%.

Crop development is however still lagging markedly. Soft wheat at the heading stage is only 37% against 96% this time a year ago. Spring barley emergence is 48% versus 95% in 2012, with only 4% of the crop tillering compared to 47% a year ago. Spring corn planting has only just begun at 1% complete, a year ago 35% of the crop was already in the ground.

A better weather forecast for the week ahead should hopefully see some progress being made, both at home and abroad.

It's not just in Europe where things are already well behind schedule, Canadian spring plantings are likely to be 2-4 weeks delayed as a thick blanket of snow covers much of the wheat area there. Spring wheat states on the US Northern Plains are similarly afflicted. Meanwhile "very heavy rainfall has accumulated in Midwest corn states in recent days, 2-3 inches in many areas"-  keeping spring corn fieldwork to a minimum, say Martell Crop Projections.

Further south "Winter wheat on the High Plains this week suffered a hard freeze on 2 successive nights with  temperatures falling into the teens-low 20s F. Producers are worried about potential yield reductions. Normally, wheat in the jointing stage is not damaged by freezing temperatures, but this cold was especially severe," they add.

The forecast for the week ahead is pretty similar for all these areas. More snow for the Dakotas and Minnesota. A storm bringing more heavy rain/wet snow for Missouri, Illinois, Indiana, Wisconsin and Iowa. "A fresh cold wave from Canada would drive into the US heartland behind the storm. Freezing temperatures are expected as far south as the Oklahoma-Kansas border," they conclude.