December 05, 2012
Wheat prices in western Europe were little changed on Tuesday with the strength of the euro weighing on prices but supportive fundamentals keeping them near contract highs. The euro extended gains on Tuesday on expectations a buyback of Greek bonds would go smoothly and as borrowing costs for indebted euro zone countries fell.
“We’re hesitating between continuing the price pullback and consolidating,” a futures dealer said. January milling wheat on the Paris futures market were off 0.25 euros or 0.1 percent at 269.00 euros a tonne by 1246 GMT. Feed wheat futures in London were also marginally lower with May down 0.15 pounds or 0.1 percent at 227.00 pounds a tonne.
A cut to Australia’s official forecast for its wheat harvest confirmed tightening supply among major exporters but the revision had been anticipated by the market, traders said. Operators also continued to monitor weather in South America, with rain hampering soy and corn planting in Argentina, but traders said it was too early to anticipate harvest impact.
Export demand remained a source of background support. A weekend purchase of US, French and Romanian wheat by Egypt, the world’s top wheat importer, showed demand for European and US wheat amid weather-related supply problems elsewhere in the world, although low weekly US export inspections on Monday cooled export sentiment in Chicago.
Weekly US and European Union export data on Thursday will provide a fresh indication of export activity. German wheat was firmed by the good export outlook and a high feed wheat market with prices holding hefty premiums over Paris. Standard milling wheat for January delivery in Hamburg was offered for sale up one euro at 281 euros a tonne with buyers at around 280 euros.
“Sellers are demanding premiums of 12 euros over Paris today and buyers are talking about an 11 euro premium,” one German trader said. “Basically the market is saying that Paris is not adequately reflecting the good export outlook and the lack of internal EU sales offers in some regions plus high feed wheat prices.”