EU Wheat Closing Comments

November London wheat ended GBP2.35 higher at GBP155.00/tonne and November Paris wheat was up EUR1.50 at EUR214.50/tonne.

Prices traded higher earlier in the session although profit-taking ahead of the weekend trimmed gains towards the end.

Export hopes for EU wheat are high following the withdrawal of Russia from the scene for the remainder of 2010. Ukraine hasn't banned exports yet, but a tightening of the regulations around analysis of shipments at the very least means vessels are being severely delayed.

Tenders this week from various North African buyers have specifically excluded Black Sea origins due to the uncertainty surrounding governmental intervention in exports from the region.

The weather forecast for Russia and Ukraine contains little in the way of precipitation through to the end of August, when winter wheat plantings normally begin.

At home Defra yesterday surprised the market my reducing the size of the UK wheat planted area by more than 70,000 ha from their March forecast. With yields down 10% at the moment, that potentially reduces the UK harvest to below 14 MMT this year.