EU Wheat Close - Monday

03/01/11 -- London wheat was closed today, although the French market was open ending with Jan Paris wheat up EUR4.50 at EUR257.00/tonne, whilst new crop Nov climbed EUR4.75 to EUR228.50/tonne.

Paris wheat climbed to contract highs following more bad news emanating from Australia over the weekend where flooding problems are going from bad to worse.

Although the wheat harvest in Queensland should be just about over heavy rains in NSW and Victoria continue to hamper growers attempts at getting the final quarter of the nation's wheat crop in.

In addition further quality downgrades may be on the cards, and at the very least there are issues regarding logistics considering that the vast majority of this season's crop is in the soggy east.

Australia is used to the parched west accounting for around 38-40% of the annual wheat crop, and the majority of it's exports too, and thus that is where much of the transportation infrastructure is located. This season production in WA is likely to only amount to 14-16% of national output.

Egypt may need to import 400,000 MT more wheat in the 2010/11 marketing year than the USDA's current official estimate, according to the USDA’s Foreign Agricultural Service.

Dollar strength, a surging US market and a strong freight advantage mean that EU wheat is still competitively priced on the world export stage.

Paris rapeseed and corn also began 2011 posting lifetime contract highs today.