April 25, 2006

 

European cash wheat holds on to previous week's gains

 

 

European cash wheat prices were mostly steady in a quiet start to the week, holding onto last week's gains on continued feed demand.

 

French spot standard wheat, basis Rouen, was steady at EUR105.00/tonne. Spot German B-quality wheat delivered to Hamburg was also mostly flat at EUR116.00/tonne.

 

Many traders expect feed demand to lend support through the end of the current marketing year, especially in Germany where old-crop, free-market supplies are tighter.

 

Spillover support from the German and French markets has kept the Spanish market steady and quiet, despite some internal pressure caused by those selling left-over old crop barley and durum stocks ahead of the 2006/07 harvest.

 

Over the weekend showers fell in key wheat producing areas of France, Spain, the UK and Germany.

 

In Spain, the rains have erased dryness fears following last season's severe drought. Yield prospects are favourable for Spanish soft wheat, durum and barley, but late season weather will still determine quality, a trader said. Initial harvesting of Spanish durum is expected to start at the end of next month.

 

French May milling wheat climbed to EUR114.75/tonne late Monday, a new high for the recent move. May then settled at EUR114.50/tonne for a gain of EUR0.50 with 1,041 lots traded. November was up EUR0.25 at EUR114.25/tonne with just 82 lots moved.

 

The gains in French wheat futures were seen even though the euro remains strong against the dollar and pound.

 

London May feed wheat was steady at GBP73.25/tonne with 221 lots moved. May feed wheat faces first tender day on Thursday.