EU Wheat Closing Comments

EU wheat futures closed very narrowly mixed Monday with Paris March milling wheat ending unchanged at EUR133.75/tonne, and January London feed wheat closed up GBP0.25 at GBP107.50/tonne.

It was a quiet inactive day ahead of tomorrow's USDA S&D, plantings and stocks report.

Whilst US winter wheat plantings are expected down by around 3 million acres, global stocks to usage is seen rising to around 30% due to two successively large harvests. World output in 2009 is seen as the second largest in history, surpassed only by 2008.

Production may decline again in 2010, but not by much unless we get a significant crop disaster somewhere. Most analysts only see global plantings down by around 2% for the 2010/11 season.

Cold temperatures seem to be causing some resistance to farmer selling, although a blanket of snow seems to be protecting EU wheat from potential crop losses.

Jordan is looking for 100,00 MT of wheat and a similar quantity of barley in a tender. The Black Sea looks the most likely favourite to win those orders.

In the UK a total of 34,116 MT of barley had been offered into intervention stores by 7 January. With 1,448 MT of this being rejected to date, cumulative net-barley offers stand at 32,668 MT.

That's a bit more significant than what has been getting put up, but things remain well behind the rest of Europe, where almost a million tonnes has already been accepted, and more than a further 1.5 MMT is under offer.