September 08, 2013
Western European wheat prices edged higher on Friday as they found support from a slight recovery in US prices, a weaker euro and slow farmer selling in Germany. Price movements were limited as the market remained capped by large northern hemisphere harvests and operators awaited direction from US government crop forecasts next week.
The absence of some French operators, who were attending a grain trade gathering in eastern France, also kept activity light, dealers said. November milling wheat on the Paris-based Euronext market was up 0.25 euro or 0.1 percent at 187.75 euros a tonne by 1318 GMT. It remained in a consolidation zone between 186 and 192 euros after unsuccessfully testing both ends of the range in the past week.
Chicago wheat edged higher to halt a run of seven straight falling sessions that have been driven by harvest progress and uncompetitive US export prices. Paris prices found extra support from a seven-week low for the euro against the dollar, which makes euro zone products cheaper for export and could make French wheat more competitive in a tender by Egypt on Friday.
“We’re going to be watching the spread between Black Sea origins and us. The euro-dollar rate is in our favour,” a dealer on the Euronext market said of the Egyptian tender. But French wheat was still expected to be penalised by higher shipping costs and lose out again to the Russian, Romanian or Ukrainian origins that Egypt has bought exclusively in its tenders so far this season.
Operators were looking to monthly US government forecasts on September 12, which analysts expect to show a cut to US soybean and corn yields due to dry weather. Weekly European Union export data on Thursday showed the smallest volume in a month at 550,000 tonnes but the total so far this season remained twice the year-ago level. Dealers said the outcome of the ongoing Russian wheat harvest could also guide the market this month, with the risk that good spring wheat volumes could lead to stiffer export competition after sluggish Russian shipments so far. Germany’s cash market also found support in a lack of farmer selling.
Standard new-crop milling wheat for September delivery in Hamburg was offered for sale at a premium of 5 euros over the Paris November contract, up 0.5 euro. There was concern about the impact of a strike by personnel manning German river and canal locks starting on Monday and set to last all week. “Many locks are likely to be closed all week, which could certainly cause logistics problems for grains being shipped on rivers and canals,” another trader said. “People are not willing to agree deals which involve inland shipping via locks. The upcoming strike is certainly holding back business.” Courtesy Reuters
Published in ZaraiMedia.com