EU Wheat Close

12/01/11 -- EU wheat closed higher with Jan London wheat up GBP1.10 at GBP196.65/tonne, and new crop Nov GBP1.75 higher at GBP169.75/tonne. Mar Paris wheat rose EUR1.50 to EUR255.50/tonne and Nov climbed EUR0.75 to EUR227.75/tonne.

The long-awaited USDA stocks and world production reports came in bullish, sending prices higher in afternoon trade.

The wheat numbers were probably the least bullish of the grains, but wheat nevertheless got dragged higher on the back of friendly data for US and global corn and soybeans.

Nearby March Paris wheat rose to a two year high of EUR261.00/tonne, before giving up some of those gains late on as Chicago wheat fell from early highs on profit-taking.

The USDA increased Argentine wheat production by half a million tonnes to 14 MMT and dropped that in beleaguered Australia by a similar amount to 25 MMT. In the US they increase exports to their highest levels since 1993/93.

Even though world production was reduced 0.8 MMT to 645.8 MMT, global ending stocks for 2010/11 were increased by 1.3 MMT to 178 MMT.

Meanwhile FranceAgriMer increased their estimate on exports outside the EU-27 by 200,000 MT to a record 11.8 MMT, 2 MMT more than last season. They also cut projected 2010/11 ending stocks to under 2 MMT from more than 3.4 MMT a year ago.