January 19, 2009

                              
EU wheat sales slow, Black Sea undercuts prices
                                 


Sales of European Union wheat remain slow with farmers reluctant to sell and Black Sea wheat prices undercutting the EU, Hamburg-based grain trading house Toepfer International said Friday (January 16) in a monthly report.

 

Even with the weakening euro, EU corn is also struggling to remain competitive on the international market due to cheaper exports available from the Black Sea region, said the report.

 

Slow sales activity has been an issue across all of the grains markets, the report added.

 

"A very large supply of grain is expected for the EU for the entire year, which will in all likelihood limit the upward potential of prices - unless substantial yield and crop losses become possible in other important exporting countries," said the report.

 

"2009 is again expected to be a good grain and oilseed year."

 

As a consequence, the grain markets have become weather markets.

 

"If it becomes apparent in the spring that in several of the world's important growing regions, in Ukraine or in the winter wheat-growing regions in the US, for example, there is above-average winter kill, which would result in a worsening in the yield and crop outlook. It will in all probability lead to sharp price increases," said Toepfer.
                                   

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