EU Wheat Closing Comments

November London wheat closed a volatile session GBP0.15 higher at GBP119/tonne, with November Paris wheat EUR1.50 lower at EUR161/tonne.

London wheat fluctuated from around GBP2/tonne higher early in the day to GBP2/tonne lower by lunchtime, before closing near unchanged levels.

The market has risen a lot over the past ten days and was due a bit of consolidation with the USDA due out today.

They were eminently predictable in my view, trimming output in Europe, Canada, Russia and Kazakhstan - but erring on the side of caution with most of those cuts.

Wheat production in Europe was only cut by just over a million tonnes to 141.82 MMT, whilst Russian production was estimated at 53 MMT. Both of those predictions are probably at least 3 MMT, and possibly as much as 5 MMT overstated.

EU grain export licences granted by Brussels for first week of 2010/11 MY were 465,000 MT, up 28 percent on last year.

At home the weather outlook remains bullish, with the only rain forecast for the weekend in the relatively wheatless northwest of the country. Daytime temperatures of 30-31C in the south east are only predicted to fall to a very warm 20C tonight.

There's no rain on the forecast for the major wheat growing areas in the south and east until next week, and it could well be too late to do much good by then.