EU Wheat Closing Comments

EU wheat closed generally with only small changes at the end of a very uninspiring week. March Paris milling wheat ended up EUR0.75 at EUR131.00/tonne, and London May feed wheat finished down GBP0.25 at GBP110.00/tonne.

Little more than a hundred lots traded all day in London.

US wheat continues to slide, with December CBOT wheat falling 17 ½ cents on the week, as Russia and Ukraine continue to market their grain aggressively, picking up the lion's share of any export interest around.

The EU has granted export licences for 7.5 MMT of soft wheat so far this marketing year (July 1st to Dec 8th), that's almost 28% down on the 10.4 MMT approved for export this time last year.

The USDA this week raised world production by 2 MMT to 673.86 MMT. Global consumption was also reduced by around 1.6 MMT, mainly in the US, the EU and surprisingly India. That leaves us with a 2.6 MMT increase in world ending stocks to 190.9 MMT.

That puts the world stocks to usage ratio at 29.5%, its highest since 2001/02, and equivalent to more than 3 1/2 months supply. In the US the stocks:usage is highest in at least the last twenty years.

On a brighter note, Ensus is gearing up to start production sometime this month, reportedly taking in around 5,000 MT of wheat on Tuesday alone. They expect to be in full production early in 2010, when the plant will use 3,000 MT of wheat a day.