August 24, 2009
EU wheat steady as farmers' reluctance to sell supports market
European wheat futures trade slightly higher Friday (August 21) as farmers resisting sales helped support prices.
Buying interest has been focused on the nearby contracts due to consumers expecting prices will continue to trend lower. However, with sellers unwilling to offer at current prices, little outright business is being conducted.
November Paris milling wheat ended up EUR0.25, or 0.2 percent, at EUR126.75 a tonne, with 3,351 lots moved. London November feed wheat traded up GBP0.25, or 0.03 percent, at GBP96.25/tonne, with 186 lots moved.
"There's no interest anywhere for anything," said a UK-based broker, adding that this is typical for a Friday in August.
Higher-than-expected yields from European crops have caught the market by surprise in recent weeks and lead to new contract lows on both the Paris and London markets.
"In the short run, further price erosion cannot be excluded, as the market is currently focusing on the progressing harvest and is ignoring the prevailing risks," said Commerzbank in a commodities note.
However, the El Nino weather conditions may damage wheat crops in some countries and when the focus shifts from the northern hemisphere harvest to the southern hemisphere harvest - where these risks are most prevalent "wheat prices should start rising again," said the bank.
Rabobank also suggests further downside is possible in September/October before "some recovery" in prices in the fourth quarter of 2009.
Standard-quality wheat prices in the French cash market delivered at Rouen were down EUR1 from Thursday at EUR116/tonne.
Paris-based November rapeseed traded up EUR1.50, or 0.5 percent, at EUR276.75/tonne with 3,093 lots moved. Liffe's Paris November corn traded up EUR0.75 or 0.6 percent, at EUR124.00, with 57 lots moved.
