EU Wheat Closing Comments

EU wheat futures closed higher Monday with January Paris milling wheat up EUR1.50 at EUR133.50/tonne, and London May feed wheat ending up GBP1.05 at GBP112.50/tonne.

Wheat rose on firmer US markets and outside influences, with gold setting record highs and firmer crude oil and equities. A weak dollar capped some gains, but nevertheless EU wheat began the week on a positive note.

India have agreed some small deals to import wheat in containerised shipments, according to media reports. If these consignments pass through customs without too much difficulty, then we may see larger bulk imports follow, with wheat prices in India as high as USD350/tonne in the south.

Stringent local quality requirements may see shippers reluctant to put up offers of Black Sea wheat against any such enquiries, that may provide a window of opportunity for EU wheat.

The Baltic Dry Index - the benchmark guide to drybulk shipping rates around the world - was up again today, it's thirteenth day of straight increases. The index has now risen an astonishing 95% in less than two months, on the back of strong Chinese demand for iron ore and coal.

That potentially makes long-haul freight particularly troublesome, and may provide some further opportunities for EU wheat closer to home.

"The world is awash with wheat, we've got burdensome stocks, it's very difficult to be optimistic, and any rallies are a God-given selling opportunity," say the 'big' newswires, strangely quoting wheat buyers with boats to fill.

I sense a strange nervousness about the market at the moment. Is there anything 'they' aren't telling us, I wonder?

And another thing, why has something like the UK wheatfeed market (a direct competitor to wheat in EU feed rations) suddenly moved up GBP25.00/tonne in a fortnight?

I've got absolutely no idea, honest. Well honest-ish.