EU Wheat Ends Lower Tuesday On Consolidation

EU wheat futures closed lower Tuesday on consolidation from recent rallies. Paris November milling wheat ended down EUR2.50 at EUR156.50/tonne, London November feed wheat closed down GBP1.50 at GBP129.50/tonne.

Outside markets pressured grains lower after a couple of weeks of steady price increases. Crude oil was lower for most of the day, dipping below $60/barrel at one point.

UK weather has improved considerably after a dry first quarter of 2009, with winter wheat crops looking a lot better than they did a month or so ago. A developing pattern of alternate warm & wet weather should help the crop improve enormously, potentially providing a much better quality wheat harvest than last year.

Things don't look quite so promising in Eastern Europe however. Drought across much of the region, combined with reduced fertiliser and pesticide inputs, seems likely to see yields down anywhere from 10-40% in 2009. Spanish output is also expected substantially lower in the coming season.

Talk that the Russian/Egyptian dispute has been resolved added a little bit of downwards pressure to EU wheat.