June 25, 2007

 

EU Wheat: Futures finished lower after recent week highs

 

 

EU wheat futures finished lower Friday in a corrective setback from recent highs and spillover weakness from the Chicago Board of Trade grains market.

 

Paris-based November milling wheat ended down EUR1.25, or 0.7 percent, at EUR175.75 a metric tonne with 2,070 lots moved. London-based November feed wheat fell GBP1.40 or 1.2 percent to end at GBP112/tonne with 277 lots moved.

 

"The farmer is not selling wheat or barley, but prices are already very high," said a German trader.

 

Most eyes remain on winter grain harvest conditions, as cutting in France continues to be thwarted by periodic showers.

 

Following quality concerns for this season's durum crop in Greece, Italy, Spain and France traders have become increasingly nervous over possible quality problems for milling wheat.

 

"Rainfall, rainfall, even next week's forecast is looking unchanged," added the German trader.

 

Still an analyst said that with much of France's wheat crop still standing, it should be able to with stand rain for a while longer until quality is really a problem.

 

French cash wheat prices were narrowly mixed Friday. New-crop standard wheat in the French port of Rouen was up EUR2 at EUR173/tonne for July/September delivery and unchanged at EUR171/tonne for October/December. Spot old-crop wheat was down EUR2 at EUR163/tonne. New crop barley delivered Rouen was unchanged at EUR170/tonne.

 

In Germany B-quality milling wheat delivered to Hamburg climbed to EUR181/tonne Thursday, up from EUR177/tonne earlier in the week.

 

Germany's wheat harvest isn't expected to reach the key northern areas for about another five weeks depending on the weather. So far that wheat shows no problems, the trader said.

 

Demand continues for spot barley. Traders pointed out that Thursday's purchase by Jordan on Thursday was sharply higher than one made a month earlier. Jordan paid US$288.20/tonne to US$291.50/tonne cost and freight Thursday, up the previous month's deal at US$259.50/tonne to US$253/tonne.

 

They point out that while Australia will see a sharp increase in barley production this year, that won't be available until autumn. In addition large demand from Saudi Arabia is being shifted to the European Union amid Ukraine's export limits.

 

November corn ended down EUR2.50 at EUR178/tonne, with 49 lots moved. November rapeseed fell to EUR1.25 to end at EUR285/tonne, with 556 contracts traded.

 

US$1 = 0.74 Euro