PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 11:41 UK, 29th Dec 2010, by Agrimoney.com
London wheat price hits record £200 a tonne

London wheat hit £200 a tonne for the first time ever on Wednesday, playing catch up with Chicago and Paris peers, as UK markets reopened after the Christmas break.

The January contract rose 1.3% to stand at £200.00 a tonne at 11:15 GMT, a record for a near-term contract in London.

The increase came against the trend in other markets on Wednesday, with Paris wheat for January easing 0.1% to E252.50 a tonne and Chicago's near-term March lot fell 0.3% to $7.96 ¼ a bushel.

Oilseeds were lower too, with Paris's near-term rapeseed  contract, currently February, falling back to E497.00 a tonne, having failed, by E0.50, earlier to hit E500.00 a tonne for the first time in two years.

However, these markets, which reopened earlier from Christmas holidays, enjoyed strong gains on Tuesday, when Chicago wheat notched up its highest close in two years, while Paris wheat broke through the E250-a-tonne mark.

'Further stress' 

London wheat prices have been supported by a strong start to 2010-11 for UK exports of the grain, which are running at twice the pace of a year before, raising the prospect of buyers being forced to turn to foreign supplies before next summer's harvest replenishes domestic supplies.

And wheat worldwide has gained support from weather factors, besides support from other food commodities, including fellow grain corn, facing the prospect of particularly tight inventories.

While the rains which have been plaguing Australia's wheat growers have eased off, "harvests are already more than six weeks late", Agritel, the French consultancy, said.

Meanwhile, concerns over dry weather in Argentina, which have centred on corn and soybeans, have begun to raise some fears of eroding wheat yields too.

And in the US Plains, where wheat seedlings have suffered from a dearth of moisture, forecasters have lowered the chances of imminent rain.

Weather service Meteorlogix said that "dry weather will further stress the crop through the dry western areas.

It added that conditions further south and east were "mostly favourable… but soils are trending drier".

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