September 1, 2008
EU wheat drops again; London November feed wheat sets 9-month low
Liffe's European wheat futures finished lower again Friday (August 29), with London November feed wheat setting a nine-month low.
This season's record-large world wheat crop continues to overhang the market, brokers and trader said.
Paris November milling wheat fell to EUR1.25, or 0.7 percent, to end at EUR186 a tonne with 3,493 lots moved. The contract closed the week down EUR8.75/tonne.
London November feed wheat dropped GBP1, or 0.8 percent, to end at a nine-month low of GBP120/ton with 395 contracts traded. On the week, the contract lost GBP5.50/tonne.
"There is just no bullish news," said a broker. "The world crop keeps getting bigger and there is rain in Australia."
On Friday, the International Grains Council once again raised it 2008-09 global wheat forecast, helping to lift the IGC world wheat ending stocks projection to 151 million tonnes, the largest since 2002-03.
Global wheat prices remained under pressure despite gains in Chicago Board of Trade corn and soy futures. Both corn and soy still have a weather story, added the broker.
"The only risk for wheat right now is if there is an early frost in the Midwest to hurt the US corn crop," said a Paris-based dealer.
"Lower-grade wheat, in ample supply in Europe and the Black Sea region, will compete strongly in feed markets," said the IGC.
The European markets will be left without influence from the US market on Monday due to a bank holiday there.
In the French cash market, standard-quality wheat for delivery to Rouen was mostly down EUR2 at EUR184 a ton for September-December delivery.