EU Wheat Ends Narrowly Mixed

EU wheat futures closed narrowly mixed Tuesday with May Paris milling wheat ending down EUR0.25 at EUR132.00/tonne, and May London feed wheat closing up GBP0.25 at GBP108.25/tonne.

The long awaited USDA crop reports provided few surprises for wheat, although it was always expected to be so, if anything fundamentally new was to come along it was always likely to be for corn or soybeans.

As it was the USDA chucked in a curved ball for beans, pegging US spring plantings 3-3.5m lower than anticipated.

Apart from that very little has changed for wheat. Saudi Arabia bought 495,000mt of mostly Canadian wheat yesterday, although some German wheat did also get a look-in.

Egypt bought 85,000mt of Russian wheat at levels around $167-169/tonne, passing on EU and US wheat yet again.

Although Russia keeps picking up the headline news EU wheat is actually moving quietly behind the scenes. Syria took 35,000mt of French wheat this week largely off the market.

Last week's numbers from the HGCA said that the UK had exported 2.3mmt of wheat by the end of January. How much of that got reported on Bloomberg or Dow Jones? Very little if you ask me, all we are getting to hear about is what a massive surplus we have.

"There's a massive amount of poor quality old-crop wheat weighing on the market that must be sold sometime soon," or words to that effect, keep cropping up on various market reports from the popular media.

Erm, with 2.3mmt of UK wheat already departed from these shores by the end of January, compared to less than a million a year ago, we seem to be doing quite well at getting rid of our crap crop thank you very much.

And everybody seems to be ignoring the fact that we will consume more than we produce in 2009/10.

But then again, these were the same news wires that told us that crude was going to $150, $200, $250, $300+ as sure as eggs were eggs a year ago.