EU Wheat Closing Comments

Paris January milling wheat futures closed up EUR0.75 at EUR132.25/tonne, and London May feed wheat futures ended up GBP0.50 at GBP113.50/tonne.

Once again there hasn't been a lot of change or fresh fundamental news. Sellers largely seem to have shut up shop until the new year, so what spot buyers are around need to pay up or make alternative arrangements.

There is still no great shortage of wheat, just a shortage of willing sellers. In the UK spot prices have now moved up the best part of GBP20-25/tonne from post harvest lows set in early September. That's a fair old bit of cash.

I'm inclined to think that that might be close to as good as it gets. If I was a wheat grower then I'd be looking to put some sales on at these levels, for both old and new crop. Nov '10 feed wheat futures closed tonight at GBP116.40/tonne, not that long ago Nov '09 was around GBP91/tonne, as you probably know I was swimming against the tide by not advocating selling then.

Now that looks like a pretty decent premium, if growers didn't think that it was big enough one then they could always have tried planting less. Unfortunately they haven't, improved planting conditions and the lack of demand for barley have seen to that.

Origin Enterprises, the owner of the Masstock agronomy chain, peg UK wheat plantings for next season up 10% to around 2 million hectares according to Agrimoney.com. That's an increase of 200,000 hectares and yield prospects have got to be better than last season after wheat was sown in appalling conditions.

On the other hand you could always leave it until after Christmas, when everyone else awakens from their post-festive slumber and becomes a seller too.

John Maynard Keynes (1883 - 1946) upon being questioned by a reporter about changing his mind on an issue responded by saying:

When the facts change, I change my mind - what do you do, sir?