May 16, 2006

 

European cash wheat stays firm despite commodity price wobble

 

 

Prices on the European cash wheat market remained firm Monday (May 15) despite a commodity-wide price wobble that pushed oil below US$70 a barrel, traders said.

 

Forecasts of declining US wheat stocks and a tender for 3 million tonnes of wheat from India maintained solid sentiment, traders said.

 

French spot standard wheat stood at EUR108 a tonne, up EUR1 on the day, while good buying interest for the new drop pushed prices for the September-December period up EUR0.50 to EUR112.50.

 

Market sentiment is likely to remain firm until the results from the Indian tender come through. The deadline for bids is on May 18.

 

In the German market, low supplies of feed wheat continue to keep prices firm. Feed wheat in South Oldenburg for May delivery stood at EUR132/tonne, unchanged on the day but up around EUR10/tonne since March.

 

"The harvest for the new crop will likely be about one to two weeks late, so that further supports prices," a trader said.

 

German B-quality wheat, basis delivery Hamburg stood at EUR122/tonne for the old crop.

 

In European futures, Matif November milling wheat settled at EUR116/tonne, down EUR0.25 on the day with 733 lots changing hands.

 

London November feed wheat settled down GBP0.20 at GBP75.40/tonne with 75 lots traded.

 

In the competing Chicago soft wheat futures, prices trimmed some of Friday's gains following the bullish USDA report.