April 23, 2009
EU wheat rises on short-covering due to contract expiry
European wheat futures trade higher Wednesday (Apr 22), boosted by short-covering in the lead up to the May contract's expiry.
"People are trying to get out of positions in May before its expiry," said a London-based broker. "The spread related trading has driven gains."
Paris May milling wheat closed up EUR2.50, or 1.8 percent, at EUR143.50 a tonne, with 7,574 lots moved. London May feed wheat ended up GBP0.95, or 0.9 percent, at GBP108.70/tonne, with 277 lots moved.
Paris' new crop premium over the old crop shrunk to close at EUR3.50/tonne, from Monday's close of EUR6.00/tonne, as farmers held off selling wheat in the hope of higher prices.
Meanwhile a weaker pound against the dollar, following record UK borrowings announced in the budget Wednesday, supported UK wheat.
Goldman Sachs forecast a bearish outlook for grain prices in the near term, predicting wheat, corn and soy would fall from current levels in the coming three months.
The bank's three-month forecast for Chicago wheat was US$4.75 a bushel, although its 12 month forecast was bullish at US$7.50 a bushel.
Chicago July wheat futures trade up 5 cents at US$5.26 a bushel as at 1637 GMT.
Standard-quality wheat prices in the French cash market delivered at Rouen were up EUR1 from Tuesday at EUR131 a tonne.
Liffe's Paris June corn traded up EUR2.25 or 1.6 percent, at EUR140.25 a tonne, with 666 lots moved. Paris August rapeseed traded up EUR3.25, or 1.1 percent, at EUR300.00 a tonne, with 1,380 lots traded.
