Old Crop London Wheat Higher, New Crop Lower

12/04/12 -- EU grains finished mixed with May 12 London wheat up GBP2.65/tonne higher to GBP174.65/tonne, whilst new crop months were GBP0.50/tonne lower. May 12 Paris wheat ended EUR1.00/tonne higher at EUR209.75/tonne, Nov 12 was EUR1.50/tonne firmer at EUR203.75/tonne.

Old crop London wheat widened the gap between it and new crop again, with the May12/Nov12 differential now standing at more than GBP20.00/tonne, at the turn of the year ot was less than a fiver.

The only plausable explanation I can give for this is the news today that Vivergo has begun taking in wheat for testing purposes ahead of rolling into production. It now looks as if they may after all begin some kind of meaningful production this side of new crop.

Strategie Grains cut their EU-27 soft wheat production estimate by a sizable 4.3 MMT today to 126.8 MMT citing frost and drought damage. They also cut their barley production estimate by 1.1 MMT from last month to 52.4 MMT and knocked 0.6 MMT off their durum wheat forecast to 7.8 MMT.

Both the wheat estimates bring them into line with forecasts from Coceral which have already been in the marketplace for a fortnight or so. As a consequence of lower wheat production Strategie Grains also lowered EU-27 2012/13 soft wheat export potential by 3 MMT to 13.5 MMT.

Both analysts also agree on a European all wheat crop of 134.6 MMT, a drop of 2.9 MMT on last year. Before the February freeze hit Strategie Grains were forecasting an all wheat crop of 142.2 MMT this year.

Decent rains have however developed for Europe over the past week or so, with more in the forecast, potentially improving new crop prospects.