EU Wheat Follows CBOT Higher

EU wheat futures closed higher Tuesday with November Paris milling wheat ending up EUR0.25 at EUR156.25/tonne, and July London feed wheat closing up GBP2.50 at GBP122.00/tonne.

Sharply higher Chicago markets dragged European grains higher despite a weak dollar.

US soybeans pushed to 7 1/2 month highs overnight after private firms Informa Economics and FC Stone both said that US ending stocks could fall below 100 million bushels this year. That equates to just about a weeks usage, which is potentially perilously tight as China keeps stockpiling US soybeans in the wake of drought in Argentina slashing the crop there to around 30-32 MMT.

US wheat also moved higher on fund buying, supported by the weak dollar and spring wheat planting delays, hitting their highest levels since January.

Concerns are also emerging for Eastern European wheat crops, particularly in Poland, Hungary, Bulgaria and Romania which has been dry and unseasonably hot for the past couple of weeks.

Conditions have improved somewhat in the UK, France and Germany however.

In London the spread between May and November narrowed a little to GBP9/tonne from GBP10/tonne at the beginning of the week. Nevertheless that's still a decent GBP1.50/tonne per month carry. Consumers appear to be banking on the idea that some pressure will come into play due to lack of available storage as the harvest nears.