August 14, 2008

 

 

EU wheat futures had a strong finish Wednesday (August 13), following the Chicago market higher.

 

The correction follows over a month of the grain markets almost consistently falling as the EU harvest has been in full swing.

 

Liffe November Paris milling wheat ended +EUR8.50, or 4.5 percent at EUR196.50 a tonne. London November feed wheat closed +GBP3.75, or 3.1 percent at GBP126.00/tonne.

 

Poor weather in some parts of the EU continues to cause quality concerns and delay harvests.

 

"Rains continue to slow cutting of the final stage of the European wheat harvest, especially in the UK," said a German trader.

 

Low protein has been an issued through most of western EU this season, which has helped increase the premium for milling wheat over feed wheat.

 

In addition there is aggressive competition from eastern EU into Spain.

 

With this year's large crop, the UK really needs to export about 1.5 million tonnes of wheat to Spain, but this is not likely to happen, said a UK-based trader.

 

Spain has largely filled its current feed grain needs through the year-end with eastern European wheat.

 

Gluten quality index for wheat has been low in eastern EU, which has added to EU's large amount of feed grain availability this season.

 

"Eastern Europe, the Baltics, and now western and northern Europe all have more feed wheat than we expected," said the UK trader.