London Wheat Posts Highest Close Since September

11/01/12 -- EU grains finished mixed although Jan 12 London wheat bucked the trend closing GBP1.60/tonne higher at GBP156.50/tonne, Mar 12 Paris wheat fell EUR0.50/tonne to EUR201.25/tonne. Other London months were between GBP0.60/tonne lower to GBP0.55/tonne higher.

For London wheat this was the highest close for a front month since late September.

Argentina got a bit more rain than was anticipated overnight and throughout today. There's a fair bit more in the forecast for tomorrow as well before the rains move away to the north. Also on a positive note, the temperatures that this front is leaving behind are much cooler than to 95-105 degrees that they have seen of late.

The trade is still debating rainfall amounts and how much benefit this event is likely to have done. Martell Crop Projections say that "2-4 inch totals (fell) in Santa Fe, Cordoba and northern Buenos Aires. These are key corn and soybean provinces."

The vibe at the moment seems to be that soybeans stand to benefit more than corn, particularly second crop soybeans (usually sown in December and often immediately after wheat) which can now benefit more fully from these rains.

The big highlight of the week apart from that is tomorrow's USDA world supply & demand and stocks report. They will also announce their ideas on US wheat plantings for the 2012 harvest. Trade opinion on this varies quite widely with some anticipating a drop of as much as a million acres from their previous estimate of 40.65 million, yet others such as Allendale are predicting an increase of up to 2.2 million.

Other news is limited. Algeria are tendering for 50,000 MT of wheat for March. South Korea is buying optional origin feed wheat to supplement it's corn requirements at heavily discounted levels to US corn.