Gap Between Old And New Crop London Wheat Continues To Widen
11/04/12 -- EU grains finished mixed but mostly lower. May 12 London wheat rose GBP1.50/tonne to GBP172.00/tonne but new crop months were GBP0.30/tonne lower. May 12 Paris wheat was EUR0.25/tonne higher at EUR208.75/tonne, new crop was EUR1.25-1.50/tonne lower.Fairly decent European rains over the past few days may have helped new crop prospects seems to be the trade's thinking.
"Generous rainfall finally developed last week in dry wheat growing areas of Europe. Moisture was very welcome after a two-month drought, February -March. Growers feared another very severe spring drought may be developing, similar to last year when France and Germany produced a sub-standard wheat harvest," say Martell Crop Projections.
"Generous April rainfall last week, plus a wet forecast ahead suggests back-to-back spring droughts may not be in the cards. The weekend forecast shows the jet stream carving out a deep trough over Western Europe, suggesting more rain may be coming to dry areas.
"Germany and northern Poland received from 0.50 to 1 inch of rainfall from last week's showers. The United Kingdom was much wetter with 1.0 - 1.5 inches of rain. France, the leading wheat country, missed out in the key northern growing area receiving only 0.10 - 0.20 inch of rain in scattered showers. The Mediterranean region suddenly grew stormy as well, causing very heavy rainfall in Spain, Italy and Romania," they add.
The differential between old and new crop London wheat continues to widen, much as it did around this time of year twelve months ago. The May12/Nov12 spread at the end of 2011 was just GBP4.25/tonne, today it has closed at almost four times that.