EU Wheat Closing Comments

Nov London wheat closed GBP1.25 firmer at GBP161.75/tonne, with Nov Paris wheat up EUR1.50 at EUR232.00/tonne.

The trade is still struggling to decide whether Friday's USDA report was bullish or bearish for wheat,

US ending stocks were dropped more than expected, but they're hardly tight at 24.5 MMT. Meanwhile world ending stocks were actually increased by 3 MMT thanks to a fall in global consumption.

In Europe, 2010/11 production was lowered from 137.5 MMT to 135.1 MMT, yet consumption here too was decreased by 2.5 MMT, with reduced EU-27 exports increasing our projected ending stocks from just over 10 MMT last month to 13.4 MMT now.

The USDA clearly believe that current prices will sufficiently ration demand on an EU and global scale.

Although we've had no official confirmation, many reports now suggest that around half of Germany's wheat crop this season will only be suitable for feeding after six weeks of non-stop rain.

The market still has a bouncing on the ceiling look, although Russian plantings are still way behind schedule and the optimum time frame has already passed in some areas. Russian wheat requires 50 days of growing time to reach the optimal tillering stage of development before winter arrives, according to Martell Crop Projections.