October 9, 2006

 

Europe cash wheat: French cash, futures down on profit-taking

 

 

Benchmark French cash wheat prices were slightly lower Friday (Oct 6) after the high hit Thursday.

 

French futures were lower on profit-taking after hitting contract highs Thursday on the back of a rally in Chicago.

 

French standard cash wheat prices in Rouen were down EUR1 at EUR149 a tonne for October-December delivery, just below the high set Thursday of EUR150 a tonne.

 

November French milling wheat was down EUR0.75 at EUR152.50/tonne with 1,333 lots traded, as of late Friday. Thursday the contract jumped to EUR154/tonne, surpassing the contract high of EUR151/tonne set Monday.

 

UK November feed wheat was down GBP1.25 at GBP93.50/tonne with only 73 contracts moved. Thursday it hit the contract high of GBP95/tonne, surpassing the high of GBP93/tonne set Monday.

 

"Light profit-taking pushed the market down," a wheat trader said. "Selling interest was not particularly strong but there also weren't many bids on the buy side."

 

While the futures markets in France and UK were down Friday, prices remained close to the contract highs set in the previous session, the trader said, as the market took it easy ahead of the weekend.

 

The trader said the market is still nervous about Australia's drought and a lower crop forecast, revised down at the end of last month from 22.8 million tonnes of new crop wheat production to 16.4 million tonnes.

 

Thursday a few people in the market caught the tale end of the news that the Ukrainian government decided to impose licensing on grain exports which also pushed prices lower, the trader added.

 

Additionally, he said "first hand selling picked up in the 15 member states, which is partly why prices are lower Friday".

 

There is talk of more grain intervention to be released from the European Union, probably from Eastern Europe, the trader said, where supplies are tighter. "This would add some sell pressure," he added.