September 7, 2009
EU wheat resumes downtrend as ample supplies weigh
European wheat futures resumed their long-term downtrend Friday (Sept 4) as ample supplies continued to weigh on the market.
"Ports around Europe are all full," said a London-based broker. "If ports are full there's plenty of wheat so consumers don't need to buy any," said the broker.
November Paris milling wheat futures closed down EUR0.75, or 0.6 percent, at EUR125.75/tonne, with 2,814 lots moved. November London feed wheat ended down GBP1.00, or one percent, at GBP95.50/tonne, with 139 lots moved.
According to brokers, farmers remain reluctant to selling into a falling market and buyers are scarce.
"The farmers' view is to hold onto wheat as long as possible - maybe until next spring, if prices continue to decline," said a UK-based broker.
Wheat prices are being pressured lower by increasing global production and weak demand, said Deutsche Bank in its weekly commodities note.
The bank noted that following the Commodity Futures Trading Commission revoking its speculative position exemptions, it expects "the CFTC and US commodity exchanges are on the brink of imposing a more stringent interpretation of accountability levels and position limits going forward," particularly in energy and agriculture "given their importance on consumer spending and inflation."
Standard-quality wheat prices in the French cash market delivered at Rouen were up EUR1 from Thursday (Sept 3) at EUR120/tonne.
Paris-based November rapeseed traded down EUR1.25, or 0.5 percent, at EUR266.50/tonne, with 1,472 lots moved. Liffe's Paris November corn traded flat at EUR122.50, with 438 lots moved.
US$1 = EUR0.698178 (Sept 7)
