A slowdown in grain exports from the Black Sea, highlighted by a warning from Kazakhstan over a shortage of railcars, is fuelling an unusual split between the fortunes of prices of 2011 and 2012 wheat in Europe.
Prices of old-crop wheat, that harvested last year and already in the barn, have outperformed in both London and Paris futures markets so far this year - raising some three-fold premiums over November 2012 contracts, which can be fulfilled by grain harvested this summer.
The trend continued on Tuesday, as Paris wheat for March edged 0.1% higher to E201.75 a tonne, increasing its premium over the November contract to E14.00 a tonne, from E4.00 at the start of the year.
In London, the benchmark old crop lot, for May delivery, stuck at £159.50 a tonne while the November lot eased, raising its discount to £12 a tonne, from a beginning-year level of £4.25 a tonne.
The dynamics reflect hiccups to supplies from all three of the big Black Sea producers – Kazakhstan, Russia and Ukraine – which, between them, had held a stranglehold over regional trade early in 2011-12.
Kazakhstan on Tuesday warned that, despite a record harvest last year, its exports in the September-to-December period had been limited to 4.1m tonnes by a "bottleneck" in the supply of railcars.
The land-locked country - which relies on transport through Russia and Ukraine to reach Black Sea ports - said it had only 5,200 grain wagons, half the number required to fulfil its export ambitions, of which only 4,500 were rail-worthy.
Meanwhile Russia itself, which has lent some wagons to Kazakhstan, is suffering a logistical squeeze which, at a time when merchants have exhausted supplies near to ports and are being forced further afield, has fuelled a rise in grain prices.
"Estimates by market operators that the wagon shortage would not be seen after the New Year have so far proven to be unwarranted," Sovecon, the Moscow-based analysis group, said on Monday.
'Sales actually cancelled'
Meanwhile, in Ukraine, farmers are proving reluctant to open silos in the face of a dismal start for their autumn-sown grains for 2012, which could spark higher prices ahead.
"There have been stories of delays to shipments already traded from the Ukraine with some sales actually cancelled because shippers could not get their hands on the grain to fill the vessels," the UK grain office of a major European commodities house said.
"The result, of course, is that supplies from elsewhere have been in much better demand," with rival exporters, such as the European Union, "getting the benefit".
Another UK-based traders told Agrimoney.com that demand for UK feed wheat "is quite strong, it really is" – in contrast to soft orders for milling grain.
Indeed, in another quirk of the current market, the UK milling premium has hit a historic low of £10 a tonne over feed, a reflection of lower demand and a high-quality crop last year.
For 2012 crop, the premium is £20 a tonne, "as plantings of grade 1 and 2 [higher grade] wheat are down, so the size of supplies is likely to be down, and of course quality is unknown", the trader added.