Old Crop London Wheat Posts First Sub-GBP150 Close Since 2011

30/01/14 -- EU grains finished mixed but mostly a little higher, attempting to rebound from yesterday's lows. Things closed with Mar 14 London wheat ending down GBP0.35/tonne at GBP149.90/tonne (the first close on a front month below GBP150.00/tonne since late 2011), whilst new crop Nov 14 London wheat closed GBP0.50/tonne firmer at GBP142.75/tonne.

Mar 14 Paris wheat was EUR0.25/tonne firmer at EUR190.25/tonne, Mar 14 Paris corn was up EUR0.50/tonne to EUR172.50/tonne, whilst Feb 14 Paris rapeseed closed EUR3.25/tonne higher at EUR366.50/tonne.

Front month Chicago, Minneapolis and Kansas wheat all set fresh contract lows yesterday.

The Met Office said that parts of the south of England have endured their wettest January on records going back more than 100 years.

The south east and south central areas averaged over 175 mm of rainfall this month, surpassing the previous wettest ever January total of 158.2 mm set in 1988. Meanwhile, the average temperature across the UK was 4.9 C in January, some 1.2 C higher than the norm.

As a whole, the UK had an average 164.6 mm of rain this month (to Jan 28), some 35% above normal. The main reason for the mild and wet weather so far was a predominance of west and south-west winds, bringing in mild air from the Atlantic, the Met Office said.

Exactly how much, if any, impact this will have on UK crop production this year remains to be seen. Does rain really make grain, as the old adage suggests?

And when is it all going to end? Unfortunately, BBC Weather presenter Nick Miller said that the long-range forecast suggested there was "no prolonged dry spell in sight".

MDA CropCast raised their Indian wheat production estimate by 5.9 MMT from last week to a record 97.4 MMT, a 6.45% increase on last year. Some forecasts are as high as 100 MMT.

Jordan are tendering for 100 TMT each of wheat and barley of optional origin for May-June shipment.

The Russian Deputy Ag Minister said that he expects the 2014 grain crop there to be around 95 MMT in his first estimate for the coming season. Everything is "normal" for now, he said. Recent heavy snowfalls have provided both Russian and Ukraine winter wheat with the protection from plunging temperatures that they required.

Defra said yesterday that the UK barley supply and demand balance is now 2.529 MMT, 83% higher compared with last season. With an operating stock requirement of 713 TMT, this means that the surplus available for export or to carry over as free stock now stands at 1.816 MMT. Cumulative barley exports for the season to end of November were "only" 636 TMT.

The UK wheat operating stock is seen at 1.48 MMT, meaning that the surplus available for export or free stock is slightly higher than forecast previously at 400 TMT. To the end of November only 167 TMT of UK wheat had been exported.

UK corn imports meanwhile are forecast at 1.726 MMT. As at the end of November 2013, cumulative imports had reached 739 TMT for the season, with a steep increase seen in November. This shift occurred due to corn entering the UK following the initial harvest delays in France and Ukraine. Corn usage in animal feed is seen at 1.762 MMT (13% higher than in 2012/13), they added.

Late in the day, Brussels reported that they'd issued 609 TMT of soft wheat export licences this past week, taking the marketing year to date total to 17.3 MMT.