October 24, 2006

Europe cash wheat: cash corrects down; futures mixed

French cash wheat prices were slightly lower Monday (Oct 23) in a quiet market as prices dropped down in a slight correction from recent highs.

French futures traded lower most of the day but January moved up slightly late in the afternoon.

French standard cash wheat in Rouen was down EUR1.00 at EUR154 a tonne for October-December delivery.

After trading down most of the day, January French milling wheat was trading up EUR0.50 late in the afternoon at EUR156.50/tonne with 794 lots traded. November was down EUR0.25 at EUR155/tonne with 389 lots traded.

UK feed wheat futures were unchanged late in the day, with January at EUR98/tonne with just 89 lots moved and November was at EUR95.25/tonne with 118 lots traded.

"People squared their books last week and are now waiting for a new opportunity," a Dutch trader said, adding people are looking to the January and June contracts.

A France-based trader said the French market corrected down. He said most consumption needs are covered until the end of December and that most Muslim countries bought before Ramadan.

Last week, the EU grain management committee opened a tender to resell about 1.6 million tonnes of intervention grain back on the domestic market, which included about 1.1 million tonnes of wheat.

"This will be slightly bearish in the nearby, but at the end of the day we are the cheapest wheat right now," the French trader said, adding that the tender has capped prices. "But in the long-term the tender isn't going to change anything."