EU Wheat Closing Comments

Posted by Nogger - a legend in his own mind at 18:56 | Categorized as

09/11/10 -- Nov10 London wheat closed with gains of GBP2.50 to end at GBP172.75/tonne, whilst Nov11 was GBP2.25 higher at GBP148.75/tonne. Paris wheat finished with Nov10 up EUR2.00 to EUR231.50/tonne and Nov11 rose EUR2.50 to EUR203.00/tonne.

London wheat posted the highest close for a front month since April 2008, albeit ending GBP1.85/tonne off the days high.

Prices opened higher but surged sharply higher after another bullish USDA report was issued at 13.30 GMT. Although that report wasn't particularly bullish for wheat compared to what had been expected, it was mildly friendly to wheat, fairly friendly for corn and outrageously bullish for soybeans.

The USDA dropped world wheat ending stocks by 2.2 MMT to 174.7 MMT, with Russian output trimmed by half a million tonnes to 42 MMT, in line with expectations.

Production in Australia was increased by 1 MMT to 24 MMT and that in Argentina upped by 1.5 MMT to 13.5 MMT.

EU-27 2010/11 wheat production was pegged at 136.3 MMT, up from 135.6 MMT last month. Exports were upped 1 MMT to 22 MMT, similar to last season.

US corn production is panning out sharply lower than the USDA's mid-summer optimism suggested. On a global level, despite raising this season's Chinese corn production to an extremely unlikely 168 MMT, world stocks to usage is now seen at only 56 days of supply, the second tightest of the past 35 years.