EU Wheat Close

November London wheat closed GBP0.70/tonne higher at GBP148.00/tonne, with November Paris wheat ending up EUR2.25 at EUR216.25/tonne.

The International Grains Council finally fell into line with other trade estimates today, cutting their global wheat production estimate by 7 MMT to 644 MMT. That marks a 20 MMT reduction in the past two months.

Most of that is down to last month's wildly optimistic Russian production estimate of 50 MMT being revised down to 44 MMT.

They now peg world consumption 13 MMT higher than production at 657 MMT.

That still leaves 2010/11 world wheat ending stocks at 184 MMT, hardly a perilously tight situation.

The USDA reported weekly export sales of just over 1 MMT, with "unknown" accounting for 246,000 MT and Egypt a further 135,900 MT. Egypt also featured taking one cargo in the weekly shipments.

Even so, that pales into relative insignificance alongside the 720,000 MT of export business that the French have manged to secure to Egypt since the Russia export ban was announced.

That highlights the competitiveness of French wheat on the world export stage, which is likely to underpin the Paris market.

August rains in the UK, Germany and Poland are casting a doubt over the quality of this season's Northern European harvest. It may well be that there is more feed grade wheat around than had been expected during the June heatwave. If so we may continue to see the gap between London and Paris wheat widen even further.