August 7, 2006

 

European cash wheat rises on feed demand, lack of selling

 

 

French cash wheat prices and futures were higher Friday, as increased feed demand met a lack of producer selling interest.

 

French standard wheat for Rouen was up EUR1.00 to EUR1.50 at EUR121.00- EUR122.00 a tonne for August-September delivery and up EUR2.50 at EUR124.50/tonne for October-December.

 

November French milling wheat was up EUR1.00 at EUR128.00/tonne with 1,942 lots traded. November UK wheat was up GBP0.25 at GBP81.25/tonne with just 27 lots moved.

 

"There has been some demand from Dutch compounders," said a grain broker.

 

Farmers are still reluctant sellers, holding out in hopes of securing higher prices later in the year. In addition there remains some uncertainty as a large chunk of this summer's crop remains out in the field, especially in Germany and the UK.

 

After an early start following this summer's heat and dryness, cutting has slowed to a near standstill due to scattered showers. So far fairly very good quality has been reported throughout most of the European Union, but continued rain could lower milling quality characteristics.

 

"If the weather improves, they could get going again Sunday, Monday and Tuesday," added the broker looking at the UK. "We don't need anymore rain, so far we have good quality."

 

Dryness is especially needed on the UK's northeast coast, where recent rain has been plentiful.

 

Earlier this summer the trade was eyeing potential for above average production, but those expectations have been trimmed back due to record breaking to near-record breaking heat late in the season.