March 5, 2009

European wheat traded higher Wednesday (March 5) in a predicted rebound after hitting fresh 2009 lows Tuesday.

 

However, both US and European markets failed to convincingly break above resistance, leading brokers to say the downtrend is set to continue.

 

"One day of positive numbers cannot make up for the weakness in the market," said a Spain-based broker.

 

Paris May milling wheat ended up EUR1.75, or 1.3 percent, at EUR136.25 a tonne, with 4,018 lots moved. London May feed wheat closed up GBP1.00, or 0.9 percent, at GBP119.00/tonne, with 145 lots moved.

 

Demand is weak, "we're still looking for fresh buyers of the old crop," said a London-based broker.

 

Another large northern hemisphere wheat crop, combined with slowing consumption growth, is keeping prices under pressure in a depressed global economy.

 

"The end of the drought in northern China along with ongoing weakness in the world economy," are weighing on the market, said Fortis bank.

 

Falling demand for feed grains in response to reduced meat consumption in countries including Spain is also hitting the markets.

 

While demand for wheat for human consumption is unlikely to fall, consumption of red meat, pork, chicken and eggs is going to, said the Spain-based broker.

 

Standard-quality wheat in the French cash market delivered at Rouen was up EUR2 from Tuesday's price at EUR127/tonne.

 

Liffe's Paris June corn traded up EUR1.25 or 1 percent, at EUR129.00/tonne, with 119 lots moved. Paris-based May rapeseed traded up EUR1.25, or 0.5 percent, at EUR267.50/tonne, with 1,617 lots moved.