European wheat prices edge higher

December 30, 2012

European Wheat
European Wheat

European wheat prices edged higher on Friday in line with Chicago futures and after a sharp fall the previous day, traders said. The rate of the euro against the dollar, which had pressured prices on Thursday, weakened on Friday, bringing further support to European grain prices, they said. “There was some panicking yesterday. We are rebounding slightly but not that much,” a Euronext trader said.

Attention on Friday was expected to focus on US weekly export sales due at 1330 GMT. By 1133 GMT, the benchmark March contract on the Paris futures market was up 2.00 euros or 0.8 percent at 250.25 euros a tonne. It shed 2.5 percent on Thursday. The spread between CBOT and NYSE Euronext wheat futures remained at historically high levels with a premium of more than 30 euros ($40) for European milling wheat over US soft wheat.

Traders said operators were entering a wait-and-see mode ahead of the close of January contract on January 10 and the next US government world supply and demand report on January 11. “It could be the calm before the storm,” one trader said. “We will have a better view when we have more data.” European rapeseed prices were also higher, recovering losses from the previous day, helped by a rise on US markets and firm oil prices. Front-month February was at 453.25 euros a tonne, up 1.34 percent on the day.

GERMANY German wheat was marked up in line with the rise in Paris, again holding on to hefty premiums over Paris prices, but in thin trade with many market participants still on holiday. Standard milling wheat for January delivery in Hamburg was offered for sale up 2 euros and well over Paris at 267 euros a tonne with buyers at around 265 euros.

“German price premiums continue to remain firm as the export prospects are good both outside and inside the EU,” one German trader said. “Russia and Ukraine are now out of the main export markets and Britain is likely to remain a big importer in coming months after its terrible harvest this summer,” he said. Repeated demand and tight supplies kept German feed wheat around the same level or even above milling prices. Feed wheat for January-March delivery in the South Oldenburg market near the Netherlands was offered for sale unchanged at 272 euros a tonne with buyers at 270 euros.

Courtesy: Reuters

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