Nogger's Blog

24/04/12 -- EU grains finished mixed with May 12 London wheat up GBP1.50/tonne to GBP175.50/tonne and Nov 12 up GBP0.75/tonne to GBP155.55/tonne. May 12 Paris wheat was EUR0.50/tonne lower at EUR214.50/tonne, new crop Nov 12 was unchanged at EUR202.00/tonne.

In euro terms May 12 London wheat closed at parity with May 12 Paris wheat, yet Nov 12 was more than a EUR10.00/tonne discount.

The USDA confirmed the sale of 480,000 MT of old crop US corn to "unknown" - widely assumed to be China. That would appear to be at least partial confirmation of the recent widely reported business between the two parties.

Should China ultimately emerge as a significant corn buyer in the ensuing 18 months, as looks possible, then that could underpin the entire grains complex going forward.

China is supposedly sitting on 46% of the world's corn stocks, according to the USDA. Yet domestic prices there are amongst the highest in the world, approaching USD10/bushel on the Dalian Exchange.

The inference that maybe they have exagerrated previous production levels seems fairly clear.

Stats Canada were out today with their estimates on plantings, placing their all wheat area at 24.32 million acres, almost a million above the 23.4 million that the trade was expecting and 13.3% up on last year.

US winter wheat crop conditions fell slighty this week to 63% good/excellent, although that is vastly superior to the 35% that we had a year ago. Maturity is also well ahead of normal with 42% of the crop headed versus 15% on average. Spring wheat plantings are also advanced at 57% done compared with 19% normally. Emergence of the latter is 18% against just 4% on average.

April has turned out to be a much heavier rainfall month that March across Europe, and that trend looks continuing into May, underpinning any further crop loss potential here.