EU Wheat Closing Comments

EU wheat futures extended their recent declines Thursday, with March London wheat ending GBP1.40 lower at GBP94.65/tonne, and March Paris wheat down EUR0.75 at EUR119.50/tonne.

For March Paris wheat that set a new bearish milestone as it was a first ever close below EUR120/tonne during the life of the contract.

Both the ECB and BOE left interest rates unchanged today, which was widely expected and consequently caused only minor ripples in the currency markets.

US wheat futures came in sharply lower in the afternoon, which added to the bearish pressure already surrounding EU wheat. Weekly US export sales announced by the USDA were a very poor 104,100 MT, down 73 percent from the previous week and 77 percent from the prior 4-week average.

It's the same old story I'm afraid, large stocks and lack of buyers. Throw in winter wheat emerging from dormancy, spring planting and harvesting in warmer climbs not too far away either and it's hard to get enthusiastic for prices. Certainly not for the next six months or so anyway.

A further weakening of the pound seems likely in the run up to the election, that might help underpin UK prices from falling too much further. Ensus are finally up and running (or is it limping?) which can't do too much harm either.

There may be some glimmers of hope on the distant horizon, but there's likely to some more pain before we get any gain.