European wheat futures lower after three-month high

October 15, 2013

European wheat
European wheat

European wheat futures edged lower on Monday as a quiet market consolidated below a 3-1/2 month high hit last week. The market remained firmly underpinned by export demand and crop concerns in South America and the Black Sea region, but was lacking fresh impetus to test major resistance points on prices charts. November milling wheat on the Paris Euronext market was 0.75 euro or 0.4 percent lower at 198.50 euros a tonne by 1339 GMT. It had risen to 200.50 euros a tonne on Thursday, its highest since June 21, but failed to hold above the 200-euro psychological barrier.

“The approaching of the top end of the upward price trend with the 200 euro level will curb potential short-term gains, especially as the contract draws closer to its expiry dates for options and futures,” consultancy Agritel said in a note. Options on the November contract will expire on Tuesday, while actual futures expire on November 11.

A subdued US market influenced the Paris trend, with Chicago wheat easing below its own 3-1/2 month high also struck last week. Brisk US and European Union exports so far in the 2013/14 marketing season have contributed to the rally in wheat futures, with EU volumes showing a record pace. Surging prices in Argentina, amid tight supply in the run-up to what could be another disappointing crop, and cuts to estimated Russian grain output by two leading analysts have underlined tight supply in the two major exporters. Standard new crop milling wheat for October delivery in Hamburg was offered for sale unchanged at 3.5 euros over the Paris November contract. Courtesy: Reuters

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