Are We Nearly There Yet Dad?

24/01/11 -- New crop November London wheat has set a fresh contract high of GBP173.50 this morning, up GBP1.50 on the day so far. Front month March Paris wheat has also set a lifetime high of EUR263.75/tonne, and currently trades just below that, up EUR3.50 on the day.

Resurgent Chicago wheat is up 12c on the overnights, adding to 21c gains on Friday, boosted by robust weekly export sales of over 1 MMT. The pace of French sales has to slacken off now as we enter the second half of the 2010/11 marketing year, that leaves the door open for the US, and to a more limited degree Argentina and Australia to boss the export arena.

The world's major wheat buyers haven't stopped buying wheat, if anything they've upped the pace as if they're frightened that we're going to run out. We aren't, but they don't know that do they? So we'd better let them have just one or two more cargoes just in case. Tunisia bought 100,000 MT of optional origin hard wheat again on Friday.

In the UK, GBP160/tonne ex farm is now widely achievable for new crop wheat off the combine. The current futures spread suggests that would value August 2012 as available at around GBP135/tonne - would that be the sale of the century or fools gold?