EU Wheat Ends Higher Thursday As Global Crops Shrink

EU wheat futures closed higher Thursday as global wheat crops for the coming season continue to shrink.

November Paris milling wheat traded up EUR2.75 at EUR161.75/tonne, and London November feed wheat closed up GBP1.50 at GBP131.50/tonne.

World wheat production for 2009 in many regions continues to shrink, with drought in Eastern Europe badly affecting crops in Romania, Hungary and Bulgaria. There are acute problems too in Spain and outside the EU in Ukraine.

Further afield spring wheat plantings in the US are likely to be curtailed with at least a million acres going unplanted, whilst early planting in Argentina and Australia is also being affected to varying degrees by drought.

In Canada below normal temperatures and freezing conditions Sunday through to Tuesday are expected to cause some damage to winter wheat. First cuttings of winter wheat in southern US states like Oklahoma and Texas are also throwing up some very disappointing yields.

In Europe there is a EUR10/tonne carry between Aug & Nov Paris milling wheat, and a GBP9/tonne carry between July & Nov London feed wheat. Both those differentials continue to scream don't sell the nears unless you absolutely have to.