EU Wheat Closing Comments

November London wheat closed GBP1.65 higher at GBP109.90/tonne and November Paris wheat ended EUR2.50 higher at EUR145.00/tonne.

Weakness in the euro and sterling continue to support EU wheat. There are also some concerns now coming into focus that recent dry weather may be causing some crop damage. Or at least the potential for some crop damage.

The IGC yesterday dropped their projections for 2010/11 EU-27 wheat output this season to 142.4 MMT, down 1.2 MMT from their previous estimate.

Farmers continue to be reluctant sellers, and prices have suddenly started to move in their favour, is this a blip or the start of a trend?

With the harvest in some parts of Europe only weeks away, I'd have to say that it seems pretty unlikely that we will see prices continue to move significantly higher from here.

Once places like Ukraine have the combines rolling they will undoubtedly come out as aggressive spot sellers no matter what. That will undermine spot levels, and most likely depress EU prices and demand, at least until Black Sea volumes have been diminished once again.