Nogger's Blog

28/06/11 -- EU grains finished sharply higher for once with July London wheat up GBP12.50 to GBP167.50/tonne and with new crop Nov climbing GBP5.75/tonne to GBP164.25/tonne. Nov Paris wheat closed EUR7.50/tonne higher at EUR195.00/tonne whilst May12 rose EUR7.00/tonne to EUR201.00/tonne.

Futures effectively reversed yesterdays losses, although little more than that with the exception of front month July London wheat. Seeing as that has fallen GBP33.00/tonne in the past fortnight then maybe that was understandable.

There was no particular reason for the reversal in fortune, apart from maybe profit-taking from those that had been quick to jump onto the short selling bandwagon during the recent demise.

There also seems to be a bit more optimism about that Greece will get their austerity measures through or else be thrown a Plan B lifeline.

Early barley harvesting is underway Russia and Ukraine, and initial yield results are promising. There has even been some very early barley cut in the UK, with more lined up for later in the week. Also there are reports of rapeseed being sprayed off ready for harvest.

There are suggestions of more than ample domestic old crop stocks still hanging around in storage in the hands of one notable major player. The same dealer got their fingers badly burnt last month assuming that May short sellers couldn't come up with the wheat to tender against the expiry of that contract. Today's price action suggests that maybe they are hoping to have a better result with July.

With the UK wheat harvest only a few weeks away too, and with consumer interest having more or less dried up they will be hoping for non-stop rain throughout July to recoup recent losses.