EU Wheat Closing Comments

EU wheat futures closed flat to mostly higher Thursday. Benchmark November London wheat closed unchanged at GBP100.75/tonne and November Paris wheat was also unchanged at EUR136.75/tonne.

Other London months posted various gains, with nearby July ending GBP2.25/tonne higher at GBP99.00/tonne. Front-month August Paris wheat also closed steadier, up EUR2.00/tonne at EUR130.00/tonne.

The USDA dropped their EU-27 wheat production estimate from 145.07 MMT last month to 142.97 MMT today. UK output was trimmed 300,000 MT to 15.7 MMT, with French production also cut slightly to 39.00 MMT.

Flooding in Poland saw it's estimate cut by more than half a million tonnes to 8.80 MMT, with Hungary also having it's output shaved to 5.10 MMT for similar reasons.

Global wheat production was reduced 3.7 MMT from last month, marking a 11.5 MMT fall from 2009/10.

"Excessive (May) rainfall was particularly unfavourable in Poland, Slovakia, and Hungary. The rains affected the wheat crop, which was in the jointing to flowering stages, and the rapeseed crop, which was primarily in the flowering stage," noted the USDA.

They also reduced their EU-27 rapeseed production estimate by 0.5 MMT from last month to 21.0 MMT.

The recent return to cooler wetter conditions is largely seen by traders as beneficial to the EU wheat crop in western areas. Flooding however is still a major problem in eastern Europe.