EU Wheat Closing Comments

EU wheat futures closed higher with May Paris milling wheat ending up EUR1.25 at EUR127.00/tonne, and London May feed wheat finishing GBP1.10 higher at GBP98.50/tonne.

There appears to have been a subtle change of mood this past few sessions.

Coceral's numbers released Friday were perhaps a tad lower than the trade had been expecting. A leading Polish producing group today pegged grain production there 6% down and wheat output 5% down in 2010.

Suddenly buyers seem a little keener to "get on" and sellers a tad more relaxed. Consumers are probably pretty lightly covered May onwards, and might just be getting ever so slightly nervous as suddenly the EU seem to be the cheapest sellers on the global marketplace.

Lets not get too carried away here, a rally will present a selling opportunity, it's simply a case of how far do you let it go.

We are possibly in for a volatile week with the USDA out on Wednesday to report on wheat acreage in the US. Whilst winter wheat is already in the ground, opinion is divided over spring wheat acres. The average trade guess is that 13.56 million acres of spring wheat will get planted this year, up slightly from 13.3 million in 2009.

There are plenty however that think that spring wheat area will also be down as well as winter wheat plantings. The March report regularly throws up a surprise or two so trade carefully.