EU Wheat Futures End Lower After Recent Rally Seen Overdone

EU wheat futures closed lower Monday on ideas that the recent rally might have been overdone.

November Paris milling wheat closed down EUR1.75, at EUR154.25/tonne, and London November feed wheat ended down GBP0.50 at GBP128.00/tonne.

The outside markets were a little more cautious today, which seemed to spill over into the grains. Crude and equities were lower on a note of profit-taking and ideas that nobody wants to overstretch themselves and get too carried away.

Still, the outlook for a smaller EU wheat crop, particularly in the UK and many areas of Eastern Europe is underpinning the market.

Uncertainty certainly abounds in other parts of the world too. The US is nailed-on to see sharply lower production in 2009. The Argentine crop will see the smallest planted acreage in 100 years and there are already concerns about early plantings in Australia. Output in Canada is also expected sharply lower.

Throw lower production from Russia and Ukraine into the mix and that is just about all the top exporting nations covered, all expecting or potentially suffering lower output in 2009.

Meanwhile farmers remain reluctant sellers, and who can blame them, with carry premiums screaming "don't sell, sit on it".