EU Wheat Ends Little Changed

It was a quiet end to a shortened trading week Thursday with May London feed wheat closing unchanged at GBP96.75/tonne, and May Paris milling wheat EUR0.25 higher at EUR125.50/tonne.

Given the disappointing numbers from the USDA yesterday, and a very weak close last night, EU futures held up surprisingly well.

This is maybe due to the recent realisation that EU wheat doesn't necessarily need to follow Chicago's lead, EU wheat is amongst the cheapest around at the moment.

Egypt bought 60,000 MT of Russian wheat in a tender today, but the trade seems almost relaxed to sit back and let the Russians pick up the orders if they want them.

Some talk suggests that EU wheat stocks maybe aren't quite as burdensome as the market rhetoric keeps making out. Others report that supplies out of the likes of Ukraine have all but dried up.

That said, the market appears to be in a state of equilibrium at the moment. After a hard winter, EU wheat seems to have suddenly made rapid progress this past few weeks. The second highest crop on record looks likely for 2010, which can hardly be viewed as overly bullish.

Crude oil made an 18 month high in excess of USD85/barrel today despite bearish stocks data coming out of the US yesterday. It's not too difficult to make a case out for crude continuing to rise throughout the remainder of 2010, which may support the grains sector in the long run.