EU Wheat Close

Posted by Nogger - a legend in his own mind at 18:59 | Categorized as

22/11/10 -- Nov10 London wheat closed GBP1.35 higher at GBP167.25/tonne, with Nov11 up GBP0.15 to GBP143.50/tonne. Jan11 Paris wheat fell EUR1.00 to EUr211.00/tonne and Nov11 was EUR0.75 lower to EUR190.25/tonne.

Once again the theme was a continued erosion of the differentials between London and Paris. A stronger euro, limping higher on the back of the weekend news of a deal for the ailing Irish banking sector, capped any chance of EU gains.

A clean sweep by the US at last Thursday's Egyptian import tender reinforces the view that US wheat is cheaper than other origins, including EU grain, at the moment.

That's no bad thing as the US have ample stocks and our own are likely to be very tight come the spring.

Just to underline the issue the USDA announced an additional private export sale of 120,000 MT to Egypt today.

Attention is now switching to what size harvests can be expected from the southern hemisphere, with Argentina and Australia next in the spotlight. In addition to that we are now starting to look at 2011 prospects, and how winter wheat will slip into dormancy in the US, Europe, Russia and Ukraine.

Reports suggest that European wheat is looking pretty good as winter approaches, although US crops are not quite so robust. Both regions are expected to see the first serious signs of winter this week.

Russia and Ukraine have been enjoying warmer than normal conditions, which should be beneficial to late planted wheat, although lingering drought hasn't gone away in some areas.