EU Wheat Close

Posted by Nogger - a legend in his own mind at 08:37 | Categorized as

26/11/10 -- EU wheat futures closed mostly higher Friday with Jan11 London wheat ending up GBP2.35 at GBP177.00/tonne and Nov11 London wheat GBP1.00 at GBP150.00/tonne. Jan11 Paris wheat closed unchanged at EUR218.25/tonne and Nov11 Paris wheat was up EUR1.00 to EUR197.00/tonne.

This was the highest close for a front month London wheat contract for more than 2 1/2 years as the gap between it and Paris wheat continues to erode.

Based on Friday's closing exchange rate of 1.1760 for the pound against the euro Jan11 London feed wheat's close was around EUR208/tonne, a discount of only EUR10/tonne to Paris milling wheat. Back in August that gap was EUR35/tonne.

Basically it is starting to look like this season's UK wheat crop has been oversold, based on the ferocious pace of exports this season.

EU wheat exports also continue at a pace, with Brussels on Thursday reporting that export licences for the marketing year to date are running almost 36% ahead of year ago levels.

A weak pound also supported UK prices, with the pound sinking two cents against the dollar on the day to end at 1.5580, its lowest in more than two months.