September 21, 2009

European wheat futures traded higher Friday (September 18) on short-covering activity, with London also supported by weaker sterling against the dollar.

 

"Any rally from here presents a selling opportunity," said UK farmer-owned cooperative Openfield.

 

Paris November milling wheat traded up EUR1.25, or 1 percent, at EUR121.25 a tonne, with 5,500 lots moved. London November feed wheat traded up GBP2.50 (US$4.05), or 2.6 percent, at GBP97.50 (US$158.27)/tonne, with 321 lots moved.

 

The firmer euro is making it difficult for European wheat to compete on the export market, said a Germany-based broker.

 

German ports are "not too full," and with firmer prices, brokers are still hoping to do more export business before selling into the European Union intervention scheme becomes an option for farmers in November, said the broker.

 

According to the Germany-based broker, around 3 million tonnes of wheat is expected to end up in EU intervention stocks in the 2009-10 marketing year, with around 1 million tonnes coming from Germany, due to ample supplies pushing prices to intervention levels.

 

England's 2009 wheat production is below expectations at 12.9 million tonnes, around 3 million tonnes lower than the previous year, National Farmers' Union figures showed Friday.

 

The fall in output has been driven by lower plantings and yields, although quality is expected to be good, said the NFU.

 

Standard-quality wheat prices in the French cash market delivered at Rouen were unchanged from Thursday's prices at EUR113 (US$165.95)/tonne.

 

Paris-based November rapeseed traded up EUR3.50, or 1.3 percent, to EUR258.25/tonne, with 3,094 lots moved. Liffe's Paris November corn traded flat at EUR117.50/ton, with 47 lots moved.

 

US$1 = EUR0.68 (Sep 21)