EU Wheat Closing Comments

EU wheat futures closed lower with London March feed wheat down GBP0.80, May down GBP0.95, and Paris milling wheat EUR0.25/0.50 lower.

London wheat set fresh life of contract lows across the board as the euro fell to 9-month lows against the dollar, making UK wheat even less competitive on the export arena.

The EU granted export licenses for 384,000 MT of soft wheat for the week ended Feb. 9th, according to customs data. That brings EU soft wheat exports to date to 10.7 MMT during the current marketing year, down 19% from the 13.2 MMT granted during the same period in 2008/09.

France AgriMer peg the French soft wheat area in 2010/11 at 4.93 million ha, up 3.9% from 2009/10. All wheat output this year looks like being close to 40 MMT, versus 38.7 MMT in 2009.

Overall, EU-27 all wheat production looks set to be around 142 MMT this time round, 2.75% up on last year.

Whilst EU farmers are unhappy with the price of wheat, they are completely demoralised with the price of barley. There may be some problems brewing in some parts of Eastern Europe with wheat production, but generally ample snow cover seems to have prevented too much damage being caused by recent very cold temperatures.