EU Wheat Closing Comments

Nov London wheat closed GBP1.05 lower at GBP137.95/tonne, with Nov Paris wheat ending EUR1.50 easier at EUR188.00/tonne.

After another few days of steep rises I guess that a decline on a bit of month-end profit-taking was overdue.

Earlier in the session wheat had risen to a two year high on news that Ukraine would effectively ban milling wheat exports for the 2010/11 season.

Reports coming out of France suggest that this season's harvest, whilst down on last year, maybe won't be as bad as was feared a month or so ago. News from Germany however appears to suggest that things are as bad as was feared, and that wheat output there may fall below 24 MMT.

Things aren't getting any better in Russia, although some reports speculate that they may ban wheat exports entirely, it seems more likely that they will be cut back to around 10 MMT in 2010/11.

The US will be eyeing the prospect of disposing of some of their sizable stocks, it just shows you if you're patient and can afford the carry then the market will ultimately come to you.

The USDA announced weekly export sales just shy of 1 MMT today, around triple what had been expected. The dollar's new found weakness will further help the cause.