EU Wheat Closing Comments

EU wheat started the week modestly lower with Paris November milling wheat closing down EUR0.75 at EUR120.50/tonne, and London November feed wheat ending down GBP0.75, at GBP96.75/tonne.

Prices are still a little above recent lows of EUR118.50/tonne and GBP91/tonne respectively. London wheat has benefited the most in the past week or so from a sharply weaker sterling.

Last week's surprise announcement from the NFU, pegging English wheat production at just 12.9 MMT, is also supportive. The UK seems to be just about the only European country who's wheat crop has got smaller across the summer.

It should be noted however, that the recent rise has very little to do with end-user buying. Our traditional number one export home of Spain has plenty of suitors beating a path to it’s door. Spanish port silos are said to be full of cheap Black Sea wheat, and the country’s livestock sector is in crisis, cutting demand significantly.

The beleaguered Ensus bioethanol refinery at Wilton on Teesside has been beset by problems throughout it's construction. An unconfirmed rumour going round the trade today is that it will now not start up until April 2010, almost twelve months behind schedule.

With an annual requirement in excess of 1 MMT of wheat, if true, this is a major blow to our chances of clearing some of the UK's surplus wheat in 2009/10.