EU Wheat Closing Comments

London feed wheat closed higher Tuesday with March ending up GBP0.90 at GBP98.40/tonne, and Paris March wheat closing up EUR0.50 at EUR126/tonne.

It was another day of consolidation, March London wheat has fallen by almost GBP13/tonne since early January and March Paris wheat by EUR8.20/tonne. We have maybe been overdue a bit of a correction this past few days.

European crops are largely looking in pretty good shape ahead of their emergence from winter dormancy.

Some concerns remain however for winter wheat in Ukraine and parts of Russia.

In Russia, the Tavropol and Krasnodar wheat areas were coaxed out of dormancy with exceptional warmth, mid December to mid January, with frequent days topping 50 F. This was followed by a bitter cold wave January 24-27 when night temperatures plummeted below zero F, say Martell Crop Projections.

UkrAgroConsult say that Ukraine winter crops were "in their worst condition in the past four years", after dry autumn planting conditions. "Spring fertilization of crops will be critical," they add, according to Agrimoney.com. Will they have any money to afford to buy spring fertilizers is the question.

Probably not is the answer. Don't go getting me wrong, I'm not turning into Jake La Motta here, but I maybe feel that prices have possibly fallen enough for the time being.

Certainly farmers don't want to sell at current levels. Buyers don't want to buy on a declining market either, but shorts WILL have to buy, and there are probably plenty of those around at the moment.