EU Wheat Closing Comments

31/12/10 -- EU wheat closed 2010 on another bright note with Jan London wheat up GBP1.15 to GBP199.00/tonne, and new crop Nov GBP1.00 higher at GBP170.50/tonne. Jan Paris wheat rose EUR4.50 to EUR252.50/tonne and Nov was up EUR3.25 to EUR223.75/tonne.

Not to be outdone, Paris corn closed with Jan EUR6.00 higher at EUR235.00/tonne, whilst Feb Paris rapeseed rose EUR1.00 to EUR497.25/tonne. In a nutshell, just about everything closed at or very close to lifetime contract highs, with all front months at or very close to historic spot month highs.

Overall front month London wheat rose a stunning 87% on the year, with Paris wheat even bettering that slightly with a 92% gain. For the record, the spot low for London wheat was on March 12th at GBP92.25/tonne, we've risen 116% since then when barley all over Europe was pouring into intervention.

Safe to say that it's been a truly astonishing year. Traders will be glad of the break to attempt to take stock and attempt to decide where do we go from here when they regroup next week.

Tight European old crop stocks will dominate their thoughts, in the wake of continued strong demand with fully half a marketing year still remaining before those reserves can be replenished.

Output prospects for 2011 look set to remain uncertain for some time yet amongst many of the major producing nations such as the US, China and Russia.

The latter has said today that it will begin selling off it's near 10 MMT of intervention grain stocks at the rate of 400,000-500,000 MT/month starting in January.

That should help see them through until next summer, but leaves them extremely vulnerable should they have another harvest disaster next year.

Best wishes for a happy, healthy and prosperous 2011. Nogger.