EU Wheat Closing Comments

EU grain futures closed mostly higher Thursday with November London feed wheat up GBP1.50 at GBP104.50/tonne, and November Paris milling wheat unchanged at EUR140/tonne.

Uncertainty remains over the size of EU crops, and those elsewhere around the globe for that matter. French analysts Strategie Grains today cut their EU-27 grain production estimate for 2010/11 by 1.7 MMT to 287.8 MMT.

Soft wheat output was increased a fraction to 133.1 MMT, although production estimates in France and the UK were reduced by May dryness. Barley output was cut by 800,000 MT to 55.6 MMT, a reduction of 10% on last season.

Heavy rains and flooding continue to hamper Canadian farmers best efforts to get their spring crops seeded. Output is likely to be sharply reduced, although opinions as to how sharply vary quite markedly.

Quality wheat looks like it could be in short supply in 2010/11, reports of early harvested wheat in the US suggest that protein levels are lower than had been hoped for.

Yesterday's Saudi tender for almost a million tonnes of 12-14% protein wheat will take a bit more off the high-end material off the market.

News that a 55,000 MT vessel is currently loading UK wheat in Southampton for Vietnam added support. That is the third such sized cargo in recent months to make inroads into "unusual" destinations, as opposed to the normal homes in near Europe.