EU Wheat Closing Comments

EU wheat futures closed higher again, extending recent gains as dry weather continues to raise production concerns.

November London feed wheat closed GBP0.50 higher at GBP110.40/tonne and November Paris milling wheat ended up EUR1.75 at EUR146.75/tonne.

"Yield potential in wheat and barley crops is under threat after a cold dry spring. Winter cereals are very short this year and drought stress symptoms are apparent in many crops with reports of leaves curling in the heat of the day," say Farming Online.

The mercury hit 28C in various parts of the UK over the weekend, but things are set to cool down markedly this week, as winds shift to northerlies, with even a possibility of light frosts again in the north of Scotland.

It's still early days, as everybody keeps pointing out, but the trade seems suddenly nervous with few participants willing to swim against the tide and discount prices in order to obtain consumer orders.

Currency concerns also continue to play a part, with Spain needing to bailout a small provincial bank over the weekend the euro remains especially weak. That gives French and German wheat a competitive edge. Exports have been running ahead of anticipated levels this past few months, and ending stocks look like subsequently being a little less heavy than was projected a month or two back.