EU Wheat Closing Comments

EU wheat futures closed flat to mostly firmer Monday with November London feed wheat ending GBP1.85 higher at GBP102.85/tonne and November Paris milling wheat closing up EUR1.75 at EUR138.25/tonne.

US wheat futures closed firmer Friday and that strength followed through into Monday's trading session, which added support to EU futures too.

Talk of sharp acreage reductions in Canada due to incessant rainfall and flooding ignited the move higher. Wheat acreage in western Canada may be the lowest since 1971, according to the Canadian Wheat Board (CWB). Barley plantings could be even worse with the lowest acreage since 1965. The CWB referred to the current situation as an "unprecedented event".

It was also a pretty wet weekend in the US too, delaying the winter wheat harvest from getting going in the top producing state of Kansas.

Quality concerns are also an issue, with many reports citing lower proteins than had been expected in wheat that has been cut further south in Texas and Oklahoma.

Over here growers are also reluctant sellers, as there are still concerns that the dry spring may have already caused some yield problems before the arrival of recent rains.

Brussels last week granted export licenses for 394,000 MT of wheat, bringing the total awarded this season to 16.8 MMT, which is better than expectations. The number would appear to confirm the competitiveness of EU wheat on the international scene aided by the weak euro.