EU Wheat Close

24/03/11 -- EU grains closed with May London wheat up GBP1.50/tonne to GBP196.25/tonne and with new crop Nov climbing GBP1.75 to GBP158.00/tonne. May Paris wheat was EUR5.25/tonne higher to EUR229.75/tonne and Nov rose EUR2.25/tonne to EUR203.50/tonne.

Wheat was narrowly mixed for most of the day until Chicago came in strongly higher late on after China surprisingly emerged as having bought two cargoes of US wheat during the past week, according to the USDA.

US weather forecasts that had been calling for beneficial rains/snow on the US Plains have also turned drier today.

That news sent US futures sharply higher, dragging EU wheat with it late in the day.

Yesterday the FAO pegged EU wheat production this year at 142 MMT, an increase of 4% on last season's 136.5 MMT.

UK merchants are still reporting a lack of cash old crop buyers at these levels. Indeed, one told me today that almost all of his existing sales to compound feed manufacturers were behind schedule, with many wanting to cash settle their overbought tonnage.

That would appear to contradict the notion that the trade is "short and caught" for the Apr/May/Jun position.