EU Wheat Closing Comments

November London wheat closed GBP3.20/tonne lower at GBP146.75/tonne, with November Paris wheat ending down EUR0.50 at EUR213.75/tonne. A weak euro and concerns over milling wheat prospects relative to those of feed wheat helped Paris futures fare better than their London counterparts.

Despite widespread scare mongering and speculation, Russia continues to deny that it will need to import grain in 2010/11. Russia's Vice Minister of Agriculture is now on record as saying that these rumours are being circulated by the activity of "unscrupulous" grain traders.

That appears to have taken some of the heat out of the market, at least for now.

The market is now concentrating on weather developments in Russia as regards winter wheat planting prospects. Recent much cooler and wetter conditions in northern wheat areas may soon spread southwards, according to some forecasts. That would certainly help winter grain plantings get closer to the recent norm of around 18 million hectares from the 12 million currently being predicted.

If they can be believed, then this season's grain harvest in Kazakhstan won't be as bad as many had feared after all, according to the Ag Ministry there. They now say that they'll harvest 14 MMT of grains this year to add to last season's hefty carryover stocks.

Rain continues to hamper the wheat harvest at home and on the continent, it's also now causing quality issues and we may see much of what looked like a promising milling wheat crop consigned to the feed bin.

The US agricultural attaché cut his EU-27 all wheat production estimate to 135.5 MMT from 138.2 MMT last season due to lower than anticipated yields. Ending stocks for 2010/11 are seen falling 4 MMT from last season to 11.9 MMT.

This season's barley crop is pegged at 54.5 MMT, down 11% from last season's 61.3 MMT, with ending stocks declining from14.4 MMT to 8.0 MMT.