EU Wheat Closing Comments

May London wheat closed GBP1.25 lower at GBP102.25/tonne, and Aug Paris wheat down EUR0.50 at EUR134.25/tonne.

It could have been worse, and it probably will be tomorrow. Gordon Brown went rather late in the day, buoying sterling at least for now, which will probably weigh on UK prices in the morning.

The USDA also did their level best to help spoil the party by suggesting that the EU-27 wheat harvest will rise by 6.2 MMT to 145.1 MMT in 2010-11.

Global inventories will rise to 198.1 MMT next season from 193.4 MMT in 2009-10, they also said.

World 2010-11 wheat production was estimated at 672.2 MMT, far higher than estimates from the likes of the IGC (658 MMT), they added.

The USDA numbers are probably too high, but they are in the market and prices will likely work lower this week on the back of them, regardless of their accuracy.

EU weather is less than ideal, with cold and dry in the forecast for major wheat producers like the UK, Spain, France and Germany this week.