EU Grains Closing Comments

Nov London wheat closed GBP1.20 higher at GBP133.95/tonne; Nov Paris wheat ended up EUR1.00 at EUR179.75/tonne. On the week as a whole London wheat gained GBP4.95/tonne and Paris wheat EUR7.25/tonne

Fund money continues to flood into the market, with Paris wheat trading a record volume - in excess of 50,000 lots for the first time ever yesterday.

Perennial bears have also been overwhelmed by the sudden surge in wheat, forcing them to also exit the market, helping to drive prices higher.

Bullish news, such as that coming out of Russia, is immediately being seized upon to drive the market higher. Bearish news such as better than expected French/US yields is being largely ignored.

The last time we whipped ourselves up into such a frenzy was 2008, and that all ended in an enormous puddle of tears as I recall.

The German Farmers' Union DBV yesterday reported that German wheat yields this season would be down by 10-20%. They are Germans, and they're farmers, do I need to say anymore?

I'm not disputing that things are bad in Russia or Kazakhstan, but do they really warrant a global price increase of a third?