November 27, 2006

EU Wheat: cash unchanged, futures weighed down by weak dollar

French and UK wheat futures were lower Friday (Nov 23), weighed down by a weak dollar against the euro and the pound.

The market was quiet except for a tender from Tunisia for feed barley, a France-based trader said. Tunisia bought 175,000 tonnes of feed barley in seven cargoes. At least three of the cargoes will be of Russian origin.

The purchase was 25,000 tonnes more than it had said it would buy.

Late in the day, January French milling wheat was down EUR1.75 at EUR152/tonne with 552 lots traded, and March was down EUR1.50 at EUR153/tonne with 348 contracts moved.

In the UK, January feed wheat was down GBP0.75 at GBP97/tonne, with 45 lots moved. March was down GBP1.00 at GBP99/tonne, with 22 contracts traded.

French standard cash wheat in Rouen was unchanged at EUR148/tonne for November-to-March delivery.

The International Grains Council increased their forecast for 2006/07 world wheat output to 587 million tonnes, an increase of 2 million tonnes from last month's forecast, but still down 31 million tonnes from last year's crop.

The IGC cut its 2006/07 corn forecast by 2 million tonnes from last month to 688 million tonnes, which is down 5 million tonnes from the 2005/06 crop.