June 20, 2006

 

European cash wheat stable to lower; Egypt buys non-EU wheat

 

 

European cash wheat prices were unchanged to slightly lower amid some disappointment after Egypt finally returned to the market and filled its needs with US and Canadian wheat.

 

French standard wheat delivered Rouen July/August was unchanged from Friday (Jun 16) at EUR110.50-EUR111.00 a tonne. September-December delivery was steady to EUR1.00 lower at EUR113.50/tonne.

 

Egypt bought a total of 230,000 tonnes of US and Canadian soft wheat for delivery in late July. Egypt has been in the market since late April as freshly harvested domestic supplies were utilised.

 

"We expected that some (European Union) wheat would be included, but it wasn't," said a trader. "But we will probably be back on the list next time."

 

Still, the trader said weather is currently much more important to the market than near-term demand. Traders in both Germany and France reported very hot and dry conditions Monday during the key grain filling stage.

 

Forecasts called for scattered showers across most of central and northern Europe over the next couple of days, which could provide some help.

 

"It's still much too early to know how yields and quality will be," said a trader.

 

In Germany, a trader said, the crop would likely be about average at around 25 million tonnes, but if extremely hot and dry conditions persist, output could be trimmed by as much as 2 million tonnes. Still, the trader said it would be highly unusual to have that much of a drop.

 

Volume remains light in New crop B-quality standard wheat delivered Hamburg basis September. Bids stood at EUR115.00/tonne and offers at EUR116.00/tonne.

 

"Sellers have withdrawn for the offers and are watching the market," the trader said.

 

November French milling wheat futures were EUR0.50 lower late Monday at EUR116.00/tonne with 142 lots traded. November London feed wheat was down GBP0.55 at GBP74.80/tonne with just 34 lots moved.