News
08.07.2009
EU wheat falls with US; harvest pressure grows
European Union wheat prices mostly eased on Monday, pressured by a drop in Chicago, weakness in oil and financial markets and the advancing winter grains harvest in the United States and Europe. Milling wheat futures in Paris fell in line with Chicago wheat, although they remained underpinned by a support zone plus worries about possible heat stress to later-developing winter wheat in northern France.
The benchmark November contract was off 0.25 euros or 0.18 percent at 140.50 euros a tonne supported by a psychological threshold at 140 euros and below that the 138-138.50 euros floor tested last week in a six month low. Operators said, a trigger this week could be soyabeans in Chicago, which fell sharply on Monday after rising last week, while wheat and corn recorded heavy loses.
"If soyabeans fall for two or three sessions then we could see grains fall faster," a trader said. The ongoing harvest, which would further bloat supplies at a time, when export demand was subdued, was also preventing a recovery in wheat prices, Euronext traders said. Feed wheat futures in London also edged lower, weighed down by the prospect of big global crops and losses across commodities, although a dealer noted that weakness in sterling, which earlier hit a one-month low against the dollar, was providing some support.
The November contract was down 0.25 pounds or 0.22 percent at 111.75 pounds a tonne. Cash markets in the EU were also cooled by the harvest. In Poland, grain prices continued to fall, even though in some southern regions, the rate of decline slowed due to floods."The coming harvest, expected to be good, is beginning to have more and more impact on grain prices," the Polish Grain Chamber said in a note published on Monday.
The note from the Chamber showed milling wheat traded at 530 - 550 zlotys per tonne at exchanges across Poland on Friday. Italian new-crop wheat prices were little changed from last week and trade volume remained very thin because, with harvesting in full swing, farmers and buyers wanted to get a better idea of the crop's quality and quantity, traders said.
High grade milling soft wheat was traded at 150-160 euros a tonne for prompt delivery, in line with prices at a key weekly cereals exchange in Bologna last Thursday, they said. Imported feed wheat for July-August delivery was offered at 140 euros a tonne in the northern port of Ravenna, 2-3 euros lower than a week ago, a trader said.
Old crop maize dropped 2 euros on the week to 151-152 euros a tonne, but new crop in a few deals was offered at 160-170 euros, with prices fuelled by concerns about crop damage from a root-worm, which attacked on maize in northern Italy. In import-reliant Spain, wheat prices have fallen below the 140-euro barrier in step with world markets while many traders awaited the outcome of a forthcoming auction of import licences under the tariff rate quota (TRQ) scheme.
Reuters
