EU Wheat Closing Comments

EU wheat closed lower for the fifth straight session Monday with Paris March milling wheat ending down EUR1.25 at EUR126.00/tonne, and London March feed wheat closing down GBP1.75 at GBP102.25/tonne.

There were no clues from the American markets, which were shut for the Martin Luther King holiday. Nevertheless, EU wheat continued to grind lower, still reeling from the aftermath of last Tuesday's USDA numbers.

A stronger sterling did little to aid London wheat's cause, holding above 1.63 against the dollar, a level which it had been struggling to hold of late.

The emergence of Kazakhstan as a new force to be reckoned with on the wheat export front seems to have been one of the main drivers today. report that the former Soviet state has agreed a deal via trading house Venus International to supply Egypt with up to 1.5 million tonnes of wheat this year.

With last springs quality spat with Russia now seemingly sorted, and no sign of a resolution to last weeks discussions with France over recent stringent changes to import rules, Egypt appear to be setting out their stall to buy most of their wheat requirements from the Black Sea in 2010.

When the world's largest wheat buyer doesn't want to know you, it speaks volumes. Of course Russia and Kazakhstan won't have a bumper harvest every year, but they've now had two on the trot. That's more than enough to service Egypt's needs at least through the first half of 2010.