EU Wheat Closing Comments

November London wheat closed GBP1.00/tonne higher at GBP153.00/tonne, with November Paris wheat up EUR3.75/tonne at EUR213.25/tonne.

Having traded lower virtually all day EU wheat finished with modest gains after Chicago wheat turned higher an hour or so after the US market opened.

The trade is divided as to whether the market has already factored in all the bad news, or indeed over-factored it in.

German analysts FO Licht today dropped their world wheat production estimate by 10.4 MMT to 645.71 MMT. They pegged the Russian crop at 44 MMT, in line with SovEcon's new estimate of 43-44 MMT.

Egypt bought 240,000 MT of French wheat over the weekend, saying that it wouldn't buy any Russian, Kazakh or Ukraine wheat until their stance on exports had been clarified.

We know what Russia's stance is, there will be no more shipments from there after the weekend until at least Dec 31st and probably until summer 2011. Ukraine have fudged around the issue, not outright banning exports, but making the red tape and analytical criteria surrounding them almost impossible for shippers to operate. Kazakhstan have publicly said that it's "business as usual" but plenty seem to think that Russia will "persuade" them otherwise.

Meanwhile UkrAgroConsult cut their Ukraine wheat crop estimate to 17.75 MMT - 15% down on last season.