EU Wheat Close

November London wheat closed GBP4.25/tonne lower at GBP148.75/tonne, with November Paris wheat down EUR6.25/tonne at EUR207.00/tonne.

A combination of pre-USDA book squaring, profit-taking and mixed signals coming out of Russia was enough to send EU markets lower.

The Russian Grain Union threw a small spanner in the works by saying that the country's beleaguered grain production would in fact come in higher than the latest 60-65 MMT Ministry estimate.

That just got one or two people thinking ahead of Thursday's USDA report. The market has moved up a hell of a long way in a very short period of time. Exactly how much of that is justified? Is it just possible that supply shortages have been over-estimated?

I think that longs would rather book some profits right now than risk it ahead of Thursday's report.

It might be interesting to note that the open interest in Nov Paris wheat fell to "only " 129k lots today, that's some 5k down from the recent high. Is the "smart" money starting to exit the market?

If it is then surely the only way is down for the November future?

Meanwhile, looking ahead, the signs are that the Argy 2010/11 wheat harvest could be up as much as 80% on last season, and Canadian farmers will plant more winter wheat than ever before. I wonder why that is......?