EU Wheat Closes Sharply Higher

Now there's a headline you haven't seen for a while! EU wheat futures closed sharply higher Monday as the markets breathed a sigh of relief that the EU-wide banking bailouts announced over the weekend might have just gone far enough to rescue the market.

Paris November milling wheat ended up EUR2.75 at EUR145.50/tonne, whilst London November feed wheat closed GBP4.75 higher at GBP94.25/tonne.

Still, the markets remain very unsure, and one up day isn't going to make the strong downwards trend go away.

Even so, there was a little bit more of an element of the markets trading the fundamentals for a change today, rather than simply mimicking outside influences.

CBOT wheat was higher throughout most of the day, helped by news of Egypt buying mixed origin, but including US, wheat across the weekend.

The French soft wheat crop was also revised marginally down today, albeit by just 200,000mt to 36.1mmt, by the French Ministry of Agriculture.

I think that the bottom line today was that we've had some huge falls over recent months amidst a tsunami of bad news. The market was overdue a bounce, and the more positive news emerging from stocks, banking and crude oil was sufficient to help that happen.