EU wheat prices fall
Wheat prices in western Europe were lower on Tuesday with the outlook for exports dented by the rise in the value of the euro this week. "Overall the euro's firmness this week coupled with rising European prices has taken a tick out of the EU's export competitiveness," one German trader said. Benchmark January milling wheat on the Paris futures market was down 1.50 euros or 0.56 percent at 268.75 euros a tonne by 1415 GMT.
Copyright Reuters, 2012
It had risen slightly on Monday after losing almost 8 euros last week in a pullback from a highest level in four-and-a-half years. "If Egypt undertakes a snap tender this week some people are starting to expect that US wheat would win," the trader added.
"I currently calculate US soft red winter at $344.50 a tonne fob, well below French which I see at $357 fob. The US has about $11 a tonne higher shipping costs to Egypt, which people are starting to think could be removed by the lower fob price."
Prices remained firmly underpinned, however, by tensions in global grain supply after poor crop weather in a clutch of top producing countries. "There is still some buying taking place by people covering themselves against an expected price rise this winter when there will be few exporters able to supply world demand," a French trader said. A new record low rating for developing US winter wheat crops, which are being affected by dry conditions, as estimated by the US government on Monday added to the bullish fundamental outlook.
Standard milling wheat for January delivery in Hamburg was offered for sale down 1 euro but still well over Paris at 280 euros a tonne with buyers at around 278 euros.
German prices were being supported by a good export line-up of ships to be loaded in the ports of Hamburg and Rostock, traders said. "Ongoing demand for German wheat is pushing up values and this in turn is pushing up Polish values that were said to have gained 8 to 12 pounds a tonne last week," UK merchant Frontier said in a market note. Feed wheat futures in London were little changed in thin volume with May off 0.25 pounds or 0.1 percent at 221.50 pounds a tonne.