EU Wheat Closing Comments

EU wheat futures closed mixed with London March wheat ending down GBP0.35 at GBP98.40/tonne and Paris March milling wheat up EUR0.25 at EUR126.00/tonne.

Sterling was stronger, which explains the continued weakness of UK wheat. Egypt bought another three cargoes of Russian wheat last night, underlying the uncompetitive nature of EU grain.

Egyptian consumption of wheat could rise by around 2.5-3.0 MMT by 2015, as the population increases, according to a government official.

That could push imports up by already the world's biggest buyer by a similar amount, no wonder everybody is fighting to be their new best mate.

Argentine farmers may well plant significantly less wheat for next season, 2010/11, than the current lowest in more than 100 years acreage, according to the Rosario Grain Exchange. That would undoubtedly push production below the current level of domestic consumption.

Even so, the burden of supply over demand doesn't look like unbalancing the stocks:usage ratio any time soon.