EU Wheat Closes Down, But Off Session Lows

November London wheat closed GBP1.35 lower at GBP148.05/tonne, with November Paris wheat ending down EUR3.50 at EUR204.25/tonne.

Both markets opened down before quickly moving sharply lower on profit-taking and a corrective stance from recent sharp gains. By lunchtime however London wheat had clawed it's way back into positive territory, only to give up some of those gains later in the session after US futures opened sharply lower.

By the close of play for EU futures, CBOT wheat was also staging it's own comeback from a weak opening on continued concerns for Russian production prospects and the threat of lower exports from the Black Sea region.

Open interest in November Paris wheat rose to 128,000 lots, 66% of the entire open interest across all months and the equivalent to 6.4 MMT. In short that is an enormous volume for a position that is, in reality, not actually that far away.

Speculative interest is said to be running at record levels now in wheat, both in Europe and Chicago, higher even that the last great price spike of 2007/08.

The warning signs are there for all to see. Indeed, winter wheat planting season will soon be upon us, it is inconceivable that growers all across the entire northern hemisphere won't increase sowings significantly with prices at these levels.

For now however the bullish trend is intact, despite today's minor setback. Rumours persist of Black Sea sellers at best deferring existing sales due to their surprising inability to purchase sufficient volumes from growers to meet these commitments.