EU Wheat Close

13/01/11 -- Jan London wheat closed GBP0.65 lower at GBP196.00/tonne, with new crop Nov GBP0.75 higher at GBP170.50/tonne. Mar Paris wheat fell EUR0.25 to EUR255.25/tonne, whilst new crop Nov rose EUR0.50 to EUR228.50/tonne.

It was a mixed bag for EU wheat, with most new crop months managing to post gains on old crop positions.

The pound fell sharply against the euro to around 1.1850 from over 1.20 in early trade. The single currency gained after Portugal's bond auction was well supported yesterday and on ideas that Spain's auction tomorrow will meet with similar approval by the markets. The US dollar dived following disappointing jobs data.

Spillover support came from sharp gains in Chicago overnight and again this morning following yesterday's bullish data from the USDA.

If you want quality EU wheat then France is pretty much your only option. There are reports circulating this week that they are importing feed wheat and also corn from Ukraine themselves, as milling grade wheat continues to pour out of the country leaving a feed grain vacuum behind it.

FranceAgriMer yesterday pegged exports to non-EU nations at a record 11.8 MMT and pegged 2010/11 soft wheat ending stocks at less than 2 MMT, 42% down on last season and the lowest in seven years.

Defra raised UK wheat production for 2010 slightly to 14.88 MMT. Their estimate for exports during the current season is woefully understated at 1.33 MMT considering that 1.2 MMT had left our shores by the end of October.