February 23, 2009
EU wheat falls on pressure from outside markets, sentiment
European wheat futures traded lower Friday (February 20) as commodity markets came under pressure from falling outside markets including equities and oil.
"It shows how fragile the (wheat) market is ... oil triggered a rally yesterday and now it's back down where it was," said a London-based broker. "Everything is (happening) on outside markets as there's no real fresh fundamental news."
Paris May milling wheat ended down EUR1.75, or 1.2 percent, at EUR141.00 a tonne, with 3,544 lots moved. London May feed wheat closed down GBP1.50, or 1.3 percent, at GBP112.00/tonne, with 317 lots moved.
"The economic gloom of the US and world economy makes it difficult to sustain any rallies without the assistance of supply dislocation," said Friday's AgResource Company report.
Grains haven't performed as well as some analysts had predicted in the downturn, with this being the first time they have been more exposed to economic cycles, as a result of their use in biofuels, said Shawn Hackett, president of Hackett Financial Advisors.
Brokers predicted that if wheat prices trade lower it's likely Egypt's state buyer GASC will look to increase its stocks to take advantage of slipping prices.
Standard-quality wheat prices in the French cash market delivered at Rouen were up EUR2 on Thursday's prices at EUR134/tonne.
Liffe's Paris June corn traded down EUR2.50, or 1.9 percent, at EUR132.00, with 245 lots moved. Paris-based May rapeseed traded down EUR6.00, or 2.1 percent, at EUR278.50/tonne, with 1,290 lots moved.
