EU Wheat Ends Mixed

EU wheat futures closed narrowly mixed Tuesday. May London wheat ended up GBP0.05 at GBP97.45/tonne, and May Paris wheat EUR0.50 higher at EUR127.25/tonne. Other months closed either side of unchanged in a subdued trading session.

UK shippers report that there's plenty of interest around in export cargoes at the moment, with many ports quietly quite busy loading vessels for the near continent and beyond.

A weak dollar, and stronger sterling and euro capped gains.

Whilst official reports from the likes of Pakistan, India and China continue to suggest that wheat production there will be relatively unchanged from last year, private estimates suggest otherwise.

The bottom line is that nobody knows for sure what output is really likely to be in these places. Common sense suggests however that political forces are at play. Indeed Pakistan and India have both indicated recently that they have so much wheat that they may soon be looking to export some.

Both countries officially have state-owned reserves well above minimum required levels. However the quality of said reserves is likely to be very poor indeed.

Quality conscious buyers are highly unlikely to want to even consider such dubious origins. Hence current tenders from the likes of Iraq are expected to be fulfilled by the "usual suspects".

Whilst the big boys pick up these sorts of tenders, UK and EU origin wheat can comfortably secure business from the likes of North Africa and beyond.

For the time being at least it seems unlikely that there is too much downside for UK wheat, and it's been a while since we have been able to say that with too much confidence. Enjoy it whilst you can.