Nogger's Blog

07/12/10 -- Jan London wheat closed down GBP0.90 at GBP186.10/tonne, and Nov GBP1.50 easier at GBP154.50/tonne. Jan Paris wheat fell EUR3.00 to EUR232.25/tonne and Nov was EUR0.25 higher to EUR209.50/tonne.

This was the second session in a row that EU wheat opened sharply higher only to close mostly easier by the end of the day.

Traded volumes have been lower this week, with one or two European nations having public holidays. Profit-taking has also been a feature as we near the year end.

Australia raised the size of their wheat crop today to a record 26.8 MMT, although export prospects were cut to 16 MMT by ABARE. They are clearly going to have much more feed wheat than normal in 2011, and will be eying potential exports to SE Asia.

The underlying fundamentals for EU wheat remain positive, although prices here are expensive enough to start to ration demand with US wheat considerably cheaper. This was especially true today as the dollar weakened on the back of comments from US Fed chairman Ben Bernanke that a third round of QE may be needed to maintain the recovery in the world’s largest economy.

US wheat therefore looks very well placed to pick up the vast majority of foreign import tenders in the first half of 2011.

There are enough concerns about wheat production around the world to keep the market on its toes for the time being. US, Chinese and Russian wheat all face an uncertain winter.