EU Wheat Closing Comments

21/02/11 -- EU wheat closed down with Mar London wheat falling GBP1.40 to GBP203.60/tonne and new crop Nov GBP3.55 lower at GBP170.50/tonne. Mar Paris wheat fell EUR2.75 to EUR260.00/tonne, with Nov down EUR4.75 to EUR230.00/tonne.

Old crop fell less than new crop as 2010/11 stocks remain tight. London wheat was GBP3-5/tonne lower for much of the day, even on old crop, so once again tonight's official close of "only" GBP1.40 lower is somewhat surprising.

US markets were closed, offering little in the way of guidance after closing heavily lower on Friday night.

Although Russia may well remain out of the export market beyond the existing summer deadline, Ukraine look set to be back in the fray as an aggressive marketeer. Their winter wheat crop is rated at more than 94% good/satisfactory, a sharp improvement on twelve months ago. They will of course be very hungry for dollars by then.

Drought conditions in China have improved somewhat, according to the Ministry there. Wheat production forecasts are moving up in Argentina, to around 14.5-15.0 MMT, almost double last season's output.

Perhaps it's outside markets that offer wheat it's best chance of scaling to new heights?

Escalating unrest in North Africa and the Middle East saw Brent crude oil push above USD105/barrel for the first time since October 2008. Libya exports more than a million barrels of crude every day and tribal leaders there have threatened to cut that supply to a trickle if Gaddafi continues to use brute force to attempt to quell the current uprising.