May 23, 2006

 

European cash wheat mostly stable

 

 

European cash wheat prices were mostly steady Monday (May 22), but held on to recent gains as nearby free-market supplies remain tight.

 

French spot standard wheat delivered Rouen was steady at EUR110 a tonne. In early May prices were closer to EUR105/tonne.

 

"Traders seem more hesitant after the recent sharp rise," said French-based Infograin, which added that a "wait-and-see attitude" dominated Monday.

 

Prices were also flat in French milling wheat futures, with November at EUR118/tonne on 240 lots traded.

 

London November feed wheat was up GBP0.35 at GBP76.40/tonne with just 17 lots moved.

 

A trader in the UK added that while the market would remain fairly tight through the end of the campaign and producers, still holding grain, are keen to hold out for higher prices.

 

In the UK, producers have already sold much more of their crop than what is seen normally, especially after government farm payments were greatly delayed, traders said.

 

German cash levels also continued to hold flat at EUR121/tonne for spot B-quality and feed wheat delivered Hamburg.

 

This was in spite of the EU Grain Management committee deciding late last week to release some German and Polish wheat out of the government intervention system onto the domestic market. Traders pointed out the stocks would not be available until about the middle of next month.

 

In addition to Monday's standoff between the end-users and producers, traders point out that trade will likely be slow later this week and early next week as many offices are closed for public holiday.

 

Thursday is a public holiday in key producing countries such as France and Germany and no EU tender is scheduled. Next Monday is also a public holiday in the UK as well as the US.

 

On the world front traders continue to watch the US market, which pushed higher again Monday due to crop concerns, despite general weakness in grains, oilseeds and the Commodity Research Bureau Index.

 

In the recent Indian wheat tender for 3.0 million tonnes, is far from being realised. Most bids consisted of Australian, European and Russian wheat, with some small amounts of US and Canadian wheat also included.