EU Wheat Closing Comments

EU wheat futures closed lower Tuesday with London March feed wheat ending GBP0.45 easier at GBP96.40/tonne and Paris March milling wheat down EUR1.25 at EUR120.25/tonne.

Having broken through resistance at EUR125/tonne a few weeks ago, Paris bears are now targeting EUR120/tonne. They did manage to breach that next important support level today, with futures dipping to EUR119/tonne at one point in early trade, a lifetime contract low, before eventually managing to claw marginally back above EUR120/tonne at the close.

Defra peg winter wheat plantings in England 10.9% higher than last year at 1.81 million hectares, they haven't issued an estimate for the UK as a whole yet. Strategie Grains though say production in the UK could come in at 16.2 MMT in 2010, 1.8 MMT higher than last year.

Soft wheat plantings in Spain are also higher, up 7.3%, and abundant winter rains could see output sharply higher in this notoriously 'feast or famine' producer. That said, very heavy rain is forecast again this week in Spain, Portugal, Italy, Greece and southeast Europe, according to Martell Crop Projections. Could they be getting too much of a good thing? I doubt it somehow.