September 17, 2012 / 11:33 AM / 5 years ago

European wheat down in step with U.S. market

European wheat futures eased on Monday in step with U.S. prices in a pause after
a broad market rally on Friday and with some spillover pressure from the
advancing corn harvest in the United States.
    * Strength in the euro and improved weather conditions for U.S. wheat sowing
also added pressure on European wheat, but healthy export prospects as
drought-reduced Russian supply runs low were keeping a firm floor under prices,
traders said.
    * In light volumes, benchmark November milling wheat on the Paris
futures markets was down 2.00 euros or 0.75 percent at 264.50 euros a tonne by
1051 GMT. 
    * On Friday, it hit a one-month high at 268.75 euros, buoyed by investor
enthusiasm at the Federal Reserve's fresh stimulus plan to help the U.S.
economy, but failed to reach a contract high of 271.50 euros seen as a key
resistance level.
    * "We had a decent push at the end of last week on the back of the Fed and
now we're correcting a touch," a futures dealer said.
    * Chicago wheat futures fell on a more favourable sowing outlook and harvest
pressure from corn as the market awaited weekly U.S. government crop progress
data. 
    * The euro, which held near a four-month high against the dollar, had only a
limited drag on Paris futures given signs that prices in major exporter Russia
were continuing to rise as supply dwindled after a sharply lower harvest.
 
    * "The rise in the euro is there but it's offset partly by the difficulty in
getting more grain out of Russia," one trader said.
    * French wheat last week scored its first sales of the season to the state
buyer in Egypt, the world's top wheat importer, offering evidence that export
demand is shifting away from increasingly scarce and expensive Black Sea supply.
    
    GERMANY 
    * Standard milling wheat for September delivery in Hamburg was offered for
sale down 3 euros at 267 euros a tonne with buyers at around 266 euros.
    * "The euro's strength is something of a disappointment at a time when a
good window for west European wheat exports had been opening as Russian wheat
fades from the market," one German trader said.
    * German feed wheat in the South Oldenburg market close to the Netherlands
continued to be quoted close to milling wheat, offered for sale unchanged at 265
euros a tonne for September delivery with buyers around 263 euros.
        
    POLAND
    * Prices in Poland rose by between 4 to 5 euros a tonne during the last week
following demand for both milling wheat and feed grain seen by exporters and
local consumers.
    * Standard milling wheat for September delivery to Polish ports was quoted
on Monday at 1,020 zloty a tonne (249.50 euros a tonne). Polish flour mills were
offering lower prices of between 940 to 960 a tonne (230 to 235 euros) delivered
to mills, traders said.
    * Polish feed wheat prices were quoted in the same range as milling wheat at
940-960 a tonne delivered to feed plant.
    * "Flour mills seem to be well covered for the next 4 to 6 weeks so they are
not in a hurry to buy grains at any price," a Polish trader said. 
    * "Exporters are still sitting on large stocks in the ports waiting for
first ships to be loaded," he said.
    * Trade talk was that a hefty 1.1 million tonnes of Polish grain has been
booked for export up to the end of January 2013 including internal EU sales to
traditional customers like Germany. The total is said to include 400,000 tonnes
of wheat, 350,000 tonnes of corn and 150,000 tonnes of rye.
        
 * Prices as of 1103 GMT
                                                                   
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
 
  Paris wheat         264.50    -2.00    -0.75   195.25    35.47
  London wheat        207.00     0.00    +0.00   153.65    34.72
  Paris maize         248.75    -2.25    -0.90   197.25    26.11
  Paris rape          517.00    -2.50    -0.48   421.50    22.66
  CBOT wheat          911.00   -13.25    -1.43   671.25    35.72
  CBOT corn           768.25   -13.75    -1.76   654.75    17.33
  CBOT soybeans      1710.25   -28.75    -1.65  1207.75    41.61
  Crude oil            98.88    -0.12    -0.12    98.83     0.05
  Euro/dlr              1.31     0.10    +8.28     1.30     1.25
 * All grain and oilseed prices for second position. Paris futures prices in
Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.
    

 (Reporting by Valerie Parent and Gus Trompiz in Paris, Michael Hogan in Hamburg
and Ivana Sekularac in Amsterdam; Editing by Helen Massy-Beresford)

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