May 25, 2006

 

European cash wheat: Old crop prices steady to higher

 

 

European old-crop cash wheat prices were steady to higher on Wednesday (May 24) due to ongoing concerns over nearby supply tightness.

 

French spot standard wheat delivered Rouen was up EUR1.00 on the day at EUR112.00 a tonne.

 

"The spot market is still tight," said a European grain trader.

 

Higher-than-expected exports to third countries and feed usage this season have contributed to the tight late-season scenario.

 

With some millers still needing to take some coverage in coming weeks, there is increased nervousness in case this season's harvest is delayed.

 

Traders point out that prices have risen EUR8.00 to EUR10.00 in recent weeks in northern Spain to EUR132.00 for June delivery.

 

German B-quality and feed wheat delivered Hamburg, basis spot, remained steady at EUR121.00/tonne. Wheat in South Oldenburg was also flat at EUR132.00/tonne.

 

The trader said German prices have reached a "plateau" for now as consumers hold off and wait to see how the European Union releases stocks out of intervention onto the domestic market.

 

There is no EU grain management committee meeting scheduled for Thursday due to Ascencion Day. Many offices are also expected to be closed on Thursday with limited staffing on Friday. Then the UK market will be closed Monday for a public holiday.

 

Meanwhile new crop futures prices dropped back from Tuesday's gains, especially as US prices also setback.

 

November French milling wheat ended down EUR1.75 at EUR118.75/tonne with 1,067 lots traded. November London feed wheat was down GBP0.50 at GBP76.50/tonne with 90 contracts traded.