EU Wheat Closing Comments

21/03/11 -- EU wheat closed lower with Mar London wheat down GBP1.20 to GBP193.15/tonne and new crop Nov GBP4.05 easier at GBP159.25/tonne. May Paris wheat declined EUR5.75 to EUR226.00/tonne, with Nov down EUR4.00 lower at EUR203.50/tonne.

It was another choppy day, with Nov London wheat opening GBP2.65/tonne higher and trading within a GBP8.05/tonne trading range across the session. Volume was relatively light.

Last week's wild swings it seems have heightened traders' awareness of downside potential, both May and July London wheat set an intraday high of GBP200.00/tonne, but neither were capable of penetrating that level to push higher.

A firmer sterling and euro contributed to EU grains overall weakness.

EU wheat crops seem to have largely done OK without looking "bumper" across the winter, with the German Farm Cooperatives Association pegging production there at 24.6 MMT on Friday, up from 24.0 MMT in 2010.

Rapeseed output is seen down to 5.42 MMT from 5.73 MMT on the back of a "very cold winter and lack of snow cover in recent weeks," they said. Winter barley output is forecast at 7.92 MMT from 8.68 MMT and spring barley production at 1.61 MMT from 1.73MMT.

The US winter wheat crop is struggling, and the chance of a late season hard freeze this weekend in parts of Kansas won't help.