EU Wheat Close

26/10/10 -- Nov London wheat closed GBP2.50 higher at GBP163.50/tonne, and Nov Paris wheat gained EUR5.50 to EUR215.75/tonne.

A resurgent pound following better than expected UK Q3 GDP capped London's gains, whilst Paris strode ahead on the back of a firmer CBOT market and the strong pace of Eu exports.

The USDA pegged winter wheat crop conditions as the worst in at least fifteen years last night, at a time when a big American crop is really needed.

Russian winter grain plantings are well behind at 13.3 million hectares compared to 18.5 million last year. Meanwhile Ukraine winter wheat plantings also look like falling short of their intended target of around 6.75 million hectares.

Whilst the world is not really that short of wheat this year, we certainly might be if those three don't deliver a decent crop in 2011.

Australia's wheat crop seems to be shrinking, and excessive wetness in the east may also be causing disease and quality downgrades.