EU wheat futures rise amid stronger sterling gains

 

 

European wheat futures trade higher, despite a stronger sterling capping gains on the London market Wednesday (March 17).

 

Better-than-expected UK employment figures boosted sterling early in the session before trimming gains. Stronger sterling is bearish for UK wheat, making it more expensive to foreign currencies.

 

Both the London and Paris wheat markets are well supported around current levels although the expectation is wheat prices could slide further, said a London-based broker.

 

May Paris milling wheat trades up EUR1.50 (US$2.05), or 1.2%, at EUR123.75 (US$169.82) a tonne, with 8,493 lots moved. London May feed wheat traded up GBP0.20 (US$0.30), or 0.2%, at GBP95.35 (US$145.94) per tonne, with 74 lots moved.

 

UK wheat exports are down sharply on the year at 1.2 million tonnes from July to January, compared with 2.4 million tonnes over the same period the previous year, data from the Home Grown Cereals Authority showed Wednesday.

 

Export competition remains tough as ample world wheat supplies see a glut of stocks.

 

"US wheat farmers are concerned by competition from the Black Sea," as the region undercuts US prices as well as other origins, said a London-based broker.

 

Wet weather in Morocco is raising disease concerns, while cold temperatures have resulted in some "spotty damage" to wheat crops in Algeria, although "no notable losses are expected," said MDA EarthSat Weather in a forecast Wednesday.

 

North Africa is a key export region for European wheat but recent large domestic crops have reduced the region's import needs.

 

Standard-quality wheat prices in the French cash market delivered at Rouen were unchanged from Tuesday's prices at EUR107 (US$146.82) per tonne.

 

Liffe's Paris June corn closed up EUR1.00 (US$1.37), or 0.8%, at EUR132 (US$181.13) per tonne, with 166 lots moved. Paris-based May rapeseed traded up EUR1.50, or 0.5%, at EUR294.75 (US$404.46) per tonne, with 906 lots moved.