London wheat closed higher again, albeit off the highs, but the May ’13 contract managed to set another record high earlier in the session; this being the fourth day in a row this has happened. The May contract has risen by over £20.00/mt within a four week time frame and new crop prices approach the £200.00/mt mark as UK and northern France experience delays in sowing due to wet conditions in the fields.

The surge in EU prices is a reflection of tight global supplies, not only wheat but all feed grains, as we have reported here in recent weeks. EU corn import licenses have reached 2.1 million mt, well above USDA forecasts, and more than double last year’s level. This comes as no surprise given the pace of grain exports and paves the way for ongoing strong import volumes over the remainder of the season, potentially pressuring Ukraine, US and S American supplies and pushing prices higher still.

It would appear that there is still a significant amount of physical cover to be taken by UK consumers in the New Year, albeit many have futures hedges in place to limit upside risks.

Friday’s USDA report, to be issued at 13:30 UK time, left US markets in a reflective state on Thursday with little in the way of direction as market participants awaited fresh news and possibly direction.