January 28, 2008

 

US strength brings up EU wheat futures, low Euro gives further boost

 

 

Liffe's European wheat futures finished higher Friday (January 28, 2008) on strength in US wheat futures and as the euro gives back some of Thursday's gains versus the US dollar.

 

Paris March milling wheat rose EUR4, or 1.6 percent, to end at EUR252 a tonne. November climbed EUR4.25, or 1.9 percent, to end at EUR223.50/tonne.

 

"We have had a lot of ups and downs this week," said a French dealer pointing to this week's outside influences such as currencies, crude oil, metals and equities.

 

On the week, Paris March and November finished just slightly higher, up EUR1.75/tonne and EUR1.25/tonne, respectively. And despite this weeks swings, both contracts held within last week's ranges.

 

"Everyone says the EU is going to be in a good position to sell soon, but this all crumbles if quantities are small," added the French dealer.

 

US wheat sales have now reached 95 percent of its intended target and Russia's 40 percent export duty goes into effect at the end of the month, helping to leave a possible window of opportunity. However the dealer said Argentina could export some more and Russia has already moved additional wheat through customs ahead of the duty.

 

EU soft wheat export licenses rose 67,000 tonnes to 3.5 million  tonnes for the week ended Jan. 22, but import licenses also rose 21,000  tonnes to nearly 4.0 million  tonnes.

 

The EU, at the same time last year, was a net exporter of 2.8 million tonnes compared to being a net importer of 500,000 tonnes currently.

 

"There has been little port activity to third countries," the dealer added. "It has just been a few cargoes to Algeria, Morocco and Western Africa."

 

London May feed wheat rose GBP1, or 0.5 percent, Friday to end at GBP188.25/tonne. November climbed GBP0.75, or 0.5 percent, to GBP154/tonne.

  

In other Liffe markets, March corn rose EUR0.50, or 0.2 percent, to end at EUR210.50/tonne. Rapeseed futures jumped to recover more from the recent setback. May ended up EUR 8, or 1.9 percent, at EUR420/tonne.