EU Wheat Closing Comments

May London wheat ended Thursday GBP0.45 higher at GBP98.10/tonne, with May Paris wheat up EUR0.75 at EUR128.75/tonne.

Signs continue to emerge that EU wheat stocks maybe won't be quite so heavy as was thought a few months ago. French analysts Strategie Grains dropped its 2009/10 soft wheat ending stocks estimate by 1.7 MMT to 14.6 MMT.

Imports were reduced by 300,000 MT and exports increased by a similar margin.

That said, the EU-27 2010 soft wheat crop was upped slightly to 134.2 MMT. Corn production rose 400,000 MT to 58.3 MMT, up 2% from 2009. Barley output dropped 800,000 MT to 56.3 MMT, down 9% from last season’s 61.8 MMT crop.

Spring wheat plantings in Ukraine and Russia are well behind normal. Whilst much of this is probably down to the hard winter and the late arrival of spring, some reports suggest that credit problems may also be a factor.

US wheat rallied on short covering, although fundamentals there remain largely bearish.

A weak US dollar capped gains, as did relatively benign growing conditions across most of Europe.