October 23, 2012: European wheat futures tracked gains in US prices to stay at one-week highs on Monday, but reaction to pre-weekend talk of an export ban by Ukraine had largely faded in a quiet start to the week’s trading. Benchmark November milling wheat was up 1.00 euro, or 0.38 percent, at 263.75 euros a tonne by 1130 GMT, matching a one-week high seen on Friday.
“We’re following a technical rebound in Chicago,” a futures dealer said, adding that recent liquidation by funds on the US market appeared to be easing. Wheat prices were supported on Friday by traders saying Ukraine would ban exports from mid-November in response to its weather-reduced harvest. But this impetus had faded, with operators saying Ukraine’s limited surplus was well priced in.
“There’s no real surprise and despite the fact that, like with Russia, the term embargo’ won’t be used in order to comply (with) WTO (World Trade Organisation) rules, Ukraine will not be able to export what it doesn’t have,” grains consultancy Agritel said in a note. “This doesn’t change anything in supply fundamentals and the export potential of the Black Sea region won’t be affected by any decision on a possible restriction.” German prices were firmed by the rise in Paris and Chicago futures on Monday, with the positive export outlook also supportive.
Standard milling wheat for October delivery in Hamburg was offered for sale up 1 euro at 267.50 euros a tonne, with buyers at around 265.50 euros. “The overall export outlook is positive although the firm trend in the euro is keeping German wheat a little bit too expensive on international markets,” one German trader said. “The crop outlook in Australia also remains poor which could also help push more demand to west Europe.”
Traders were also expecting more milling wheat import demand in coming weeks and months from Britain after the poor British wheat harvest this summer. German feed wheat prices remained close to milling wheat levels, because of expected tight feed grain supplies as a lower EU maize harvest looms and Black Sea feed grain exports sell out. Feed wheat for November-December delivery in the South Oldenburg market near the Netherlands was offered for sale up 1 euro at 266 euros with buyers at around 263 euros.