EU Wheat Declines Late In The Day

Posted by Nogger - a legend in his own mind at 19:21 | Categorized as

01/03/11 -- EU wheat futures closed lower with Mar London wheat down GBP1.15 at GBP199.85/tonne, and new crop Nov falling GBP1.50 to GBP163.00/tonne. Paris wheat closed with Mar EUR0.25 lower to EUR257.25/tonne and Nov down EUR0.75 to EUR218.50/tonne.

Wheat was higher for most of the day, but slid into negative territory late on as Chicago fell and crude oil gained.

The situation in the Middle East continues to drive oil higher, prompting a switch out of "risky" grains.

"Soil moisture has improved in France, the UK, and Spain with increased rainfall in the past 2 weeks, although more is needed," say Martell Crop Projections.

Crop conditions in the US meanwhile are giving serious cause for concern, with winter wheat in Kansas - the top producing state - now rated only 25% good/excellent compared with 53% a year ago.

ABARES say that the world will produce 675 MMT of wheat in 2011, some 30 MMT or 4.7% up on last year.

A resurgent pound, buoyed by ideas of modest interest rate rises during the second half of 2011, capped London wheat gains.

Domestic demand from the feed sector remains sluggish at best.