EU Wheat Closing Comments

EU wheat closed higher Friday, London wheat ending with Mar GBP1.55 higher at GBP94.55/tonne, and Paris May wheat up EUR1.25 at EUR126.25/tonne.

A strong dollar helped EU wheat close in positive territory for the week, with March London wheat finishing with gains of GBP2.25 and May Paris wheat EUR4.50 higher than last Friday.

Soft wheat export licences were issued for almost 500,000 MT in the past week, bringing totals for the current marketing year to 12.7 MMT, 18% down on year ago levels of 15.5 MMT.

Crop conditions in Ukraine and Russia are behind recent years, after the harsh winter appears to have taken it's toll. It's still early days yet, but reduced field work due to either underfoot conditions or credit restrictions may also knock a fair bit more off final yields yet.

That said, it seems highly unlikely that prices are going to roar away upwards. A modest correction might be about as good as it gets.

Around 4.2 MMT of mostly barley currently resides in EU intervention stores, that figure may rise to around 7 MMT before the support program ceases in the summer, some traders are saying.

In the UK only around 100,000 MT has been accepted into intervention so far this year, whereas in France it is closer to 1 MMT. That grain clearly has to come back onto the market at some point.