June 13, 2006

 

European cash wheat: French new crop prices rise

 

 

French new crop cash wheat and futures prices were higher Monday, following the hot and dry weather in key growing areas over the weekend and a US price recovery.

 

French standard wheat delivered Rouen, July-August, was up EUR2.00 from Friday at EUR111.00 a tonne.

 

"Crops are in a critical stage," said French Infograin Monday (Jun 12), adding that a spell of dryness and high temperatures could threaten quality and reduce yields.

 

Many of the principal European wheat areas are in the key grain filling stage of development and have been hit by hot temperatures and limited rainfall for the last week.

 

Meteorlogix reported above-normal temperatures for most of Europe over the weekend, with well-above normal temperatures in west-central Europe.

 

The heat continued Monday and is expected to remain through Tuesday with the above average temperatures spreading to north-central Europe. However, the near-term outlook is for temperatures to fall slightly.

 

In a long-term forecast issued Monday, forecasters at Cropcast said heat and dryness is becoming established and is expected to continue to dominate through the summer in France and northern Spain.

 

French November milling wheat was up EUR1.75 late Monday at EUR118.25/tonne with 603 lots traded. November reached a high of EUR118.50/tonne earlier in the session, its highest point since late May.

 

In similar trade, London November feed wheat finished up GBP0.95 at GBP75.95/tonne with 115 lots moved.

 

Brokers said some support stemmed from a recovery in the US following Friday's drop. Chicago wheat futures were higher overnight and at the start of Monday's daily session.

 

The trade remains jittery due to forecasts for a decline in global supplies in 2006/07. More of a focus has been on the Australia wheat crop, where hot and dry weather in hampering early crop development, but traders point out that the season is still very young for that crop.

 

Interest in the French old crop has declined with the new crop harvest around the corner. French old crop wheat delivered Rouen Monday stood mostly at EUR107.00/tonne, down EUR1.00 from Friday.