May 31, 2006

 

European cash wheat: Old-crop prices steady

 

 

European old-crop cash wheat prices were mostly steady Tuesday (May 30), but the market remains fairly quiet at higher levels.

 

Many buyers were choosing to wait for the European Union to release intervention stocks in early June. But sellers were also content to hold out due to the current tight free-market supply situation, especially as the US market remained strong.

 

French spot standard wheat delivered Rouen stood steady at EUR111.00-EUR112.00/tonne. Delivery for July-August was also unchanged at EUR112.50/tonne.

 

German B-quality and feed wheat delivered Hamburg, basis spot, was also flat at EUR122.00/tonne. For new crop, bids basis September were at EUR116.50/tonne, while offers were at EUR117.50/tonne, traders said.

 

"There is nothing left for the old crop," said a German trader. "Everyone is waiting for the 100,000 tonnes of intervention wheat."

 

That tender is expected to be open in a little over a week.

 

Due to the slow old-crop trade, there have been some increased negotiations in for new crops.

 

In Germany a trader currently estimates the domestic crop at 24.0 million to 25.0 million tonnes, which is in line with production seen over the previous two seasons.

 

While Germany's weather in the first half of May was more summer-like with hot and dry conditions, the second half of the month saw more cool and wet conditions.

 

If the cool weather continues, the bulk of German wheat harvest could take place at the end of August, compared to mid-August as seen normally.

 

Meanwhile London November feed wheat rose GBP0.75 to settle at GBP77.35/tonne with 160 lots traded. Earlier November set a fresh contract low of GBP77.75/tonne.