EU Wheat Sharply Higher For Once

EU wheat futures closed sharply higher for once, buoyed by firmer stock markets, crude oil and overnight CBOT futures.

Paris March milling wheat closed up EUR2.75, or 2.2%, at EUR126.25/tonne. London May feed wheat traded up GBP2, or 2.1%, at GBP95.50/tonne.

Prices regained some of last week's losses with farmer selling exceptionally light at current levels.

Reports coming out of Australia continue to suggest that there has been some serious quality losses due to persistent rains.

Australian durum wheat has risen by $90/tonne during the last week, according to some reports. Farmers who were looking at prices only three or four weeks ago of around A$380 (per tonne) delivered Newcastle, have seen prices increase to A$520 delivered Newcastle, according to

With output from Argentina also seen around 6mmt lower than 2007, world wheat supply and demand is looking at tight ending stocks for 2009, with little room for a crop disaster.

The potential for significantly lower yield potential still exists, with fertiliser prices remaining stubbornly high, there is every likelihood that many farmers the world over will cut back on inputs.

Adverse weather conditions, coupled with a lack of inputs, has the potential to slash yields, and final production numbers, in 2009. That would make the global balance sheet look perilously tight come next season's harvest.