EU Wheat Closing Comments

Front month November London wheat closed GBP3/tonne lower at GBP152/tonne, with November Paris wheat ending down EUR2.50/tonne at EUR212/tonne.

It was a very subdued day after all the recent activity, with only 262 lots traded in London wheat all day. Paris wheat saw more action, but volumes were also low by recent standards. Open interest in November remains high.

Although Russian analysts SovEcon dropped their Russian grain production estimate to 59.5-63.5 MMT, rain in the forecast for the region later in the week took the bullish shine off prices today.

The arrival of decent rains on the scene might not do much for this season's crop, but it would certainly help plantings for 2011. The more promising things look for next season, the greater the chance of the Russian export ban being rescinded during the current marketing year.

Traders will be conscious that, with prices where they are, European and American farmers will be looking to increase winter wheat plantings for 2011. Low prices last season saw US farmers cut their winter wheat area by 6 million acres to the lowest since 1913. Already there is talk of most, if not all of those acres coming back into wheat production this time round.