May 13, 2004



Europe Cash Wheat Review: Mixed, UK Market Up On Spanish Demand


Prices on the European cash wheat market were mixed Wednesday with lower prices on the French and German markets, while the U.K. market rose following demand from Spain, traders said.


Many participants on the French market were staying on the sidelines until the release of the U.S. Department of Agriculture's May crop production and supply and demand reports, traders said, with the French futures market not trading until the afternoon as an indication.


The report was construed as neutral overall with tighter world wheat ending stocks underpinning prices, while smaller-than-expected cuts to soybean supplies weighed on prices, traders said.


French standard wheat, basis Jly and delivered Rouen, was quoted EUR137/ton May-June, EUR1 down on the day.


French new-crop standard wheat, on the other hand, stood at EUR117/ton July-August, up EUR1 on the day.


"There is a lack of buyers on the old crop that is weighing on prices," a trader said.


Demand from Spanish consumers strapped for supplies, due to an expected delay in the wheat and barley harvest in Spain, has not yet surfaced, traders said, with U.K. feed wheat finding more demand.


The German B-quality wheat market has been weaker since the beginning of the week as remaining supplies from farmers coming forward have not found much buying interest. Consumers are keen to buy as little old-crop wheat as possible, considering the sizable spread between old-crop and new-crop prices.


German B-quality wheat, basis delivered on the benchmark domestic market South Oldenburg, was quoted at EUR152/ton May, down EUR3 since Monday.


New-crop German B-quality wheat was also under pressure following rains that eased worries over dryness, particularly in the eastern parts, traders said.


Prices were quoted at EUR121-EUR123/ton Sep, basis delivered Hamburg.


U.K. export feed wheat benefited from Spanish consumer demand, where rain is delaying the domestic wheat and barley harvest. Therefore, sparsely covered consumers have resorted to the sharply lower U.K. market to cover requirements.


U.K. feed wheat, basis on coasters East Anglia stood at GBP94-GBP95/ton, up GBP2 on the day.


On the domestic market, consumers also took advantage of lower old-crop and new-crop prices with both millers and animal feed compounders buying at the lower levels, traders said.


Old-crop feed wheat, basis delivered East Anglia stood at GBP92 May, up GBP1 on the day.

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