October 22, 2007

EU Wheat: Higher, spillover trade from US buoys

European wheat futures rose Friday (October 19), after a week of yo-yoing within a tight range, on spillover trade from the US and rumours that Russia will increase its export duty on wheat to 30 percent from 10 percent.

Paris November milling wheat finished up EUR6.25, or 2.6 percent, at EUR243.00 a tonne with 721 lots moved. January closed up EUR6.50, or 2.7 percent, also at EUR243.00/tonne with 1,979 lots moved.

London feed wheat finished up GBP3.25, or 2.1 percent, at GBP158.25/tonne with 787 lots moved.

US Chicago Board of Trade December wheat futures hit limit-up, or 30 cents higher, trading at US$8.55 1/2 per bushel as at 1753 GMT on news that US wheat is more competitively priced on the world market after a recent setback.

Suggestions that Russia is considering increasing the new export duty for wheat, in place as of November 12, to match the 30 percent export duty for barley, helped to drive up prices in Europe. The purpose of the duty is to limit the current pace of wheat exports.

Underlying buying support from speculators is also keeping prices up, said a London-based broker.

French standard cash wheat delivered to the main port of Rouen was mostly up EUR7 from Wednesday at EUR239/tonne for October to March delivery.

Liffe Paris-based November corn finished up EUR4.00, or 1.9 percent, at EUR213.50/tonne, with 102 lots moved. November rapeseed ended up EUR1.50, or 0.4 percent, at EUR372.00/tonne, with 606 lots traded.