February 3, 2005

Europe cash wheat steady, awaiting EU meeting

European cash wheat prices are steady Wednesday ahead of this week's European Union cereals management committee meeting where the first export refunds for wheat since June 2003 are expected to be awarded, traders said.

"Those who have loaded vessels in port will be the most aggressive in their bidding," a French trader said.

Traders estimate the first export refunds awarded will be EUR5 a metric ton or less.

A German trader said that new business will require EUR10/ton to EUR15/ton in wheat export refunds to compete with Argentina, which he quoted at US$106/ton to US$108/ton, FOB basis for February shipment.

The French trader quoted French standard wheat, basis delivered Rouen flat price for February, at EUR106/ton, with an extra EUR4 FOB.

The USDA Tuesday quoted Soft Red Winter wheat, basis FOB Gulf, at US$3.8425 per bushel, or US$141.18/ton.

The German trader said that Sudzucker, which will open a wheat-based ethanol fuel plant later in the year, has been buying wheat at EUR107/ton to EUR108/ton, basis delivered factory August to December. The plant will need 700,000 tons of wheat, which are likely to be new crops from 2005, he said.

European wheat futures are mostly unchanged with Liffe May at GBP69.20/ton, unchanged on the day at 1617 GMT while French Matif March was EUR0.25 higher on the day at EUR107/ton.