EU Wheat Closing Comments

EU wheat futures closed lower Tuesday, although only partially giving up some of recent gains. A bit of rain and cooler temperatures are back in the forecasts, which maybe encouraged a bit of selling.

November London feed wheat closed GBP1.15 lower at GBP109.245/tonne, with November Paris milling wheat ending down EUR2.25 at EUR144.50/tonne.

Not everyone is convinced. The executive director of Paris-based Agritel, said that rain expected to douse France in the second half of the week looked likely to prove patchy, and would fail to provide relief to all areas where dry weather has damaged crop prospects, according to

The weak euro and sterling have enabled EU exporters to crank up sales, and that has tightened old crop stocks more than was anticipated. Although carryout is still significant whilst production concerns remain over new crop, long holders of old crop seem to feel comfortable about carrying stocks up to the wire.

A lot of consumers maybe got a bit complacent about continually falling prices. Basically, we have been in an almost unbroken downtrend for twelve months now. Almost everybody expected that to continue, and most end-users seem to have structured their books in anticipation of prices falling further as new crop approached. That seems to have caught many on the hop.

Things could get pretty volatile for old crop wheat between now and next harvest. New crop price prospects depend on the weather and the currency markets, and both of those are in the lap of the Gods.

Given current pricing structures however, I'd have to say that it would be pretty reckless not to get some new crop sales away at these levels if you haven't done so already.