EU Wheat Closing Comments

Posted by Nogger - a legend in his own mind at 22:32 | Categorized as

27/10/10 -- Nov10 London wheat closed GBP1 higher at GBP164.50/tonne and Nov10 Paris wheat up EUR3.25 to EUR219.00/tonne.

In London the old crop/new crop differential continues to narrow, with Nov11 London wheat ending the day with gains of GBP2.75 to GBP143.25/tonne.

Clearly the notion that a discount of more than GBP20/tonne for Nov11 over nearby Nov10 represents an attractive buying proposition is starting to catch on.

With US winter wheat conditions amongst the worst in years due to La Nina, Russian plantings well behind normal, Ukraine's crop stunted and Western Australia wheat wilting there's more than one reason to suggest that the current supply tightness could extend into the 2011/12 crop.

At home UK winter wheat plantings are only expected to show a modest increase for next year's harvest, despite current prices. The high price of rapeseed has got something to do with that, with Paris rapeseed for Nov10 closing just EUR0.50 short of the magical EUR400/tonne mark tonight, an all time contract high.

A firmer pound capped some of London's gains, as sterling gained further following yesterday's gains after Q3 GDP growth came in much better than expected.