EU wheat prices supported by rising U.S. markets

29.09.2016

European wheat futures edged higher on Wednesday, supported by firmer U.S. prices in Chicago, as the market continued to consolidate in thin volumes.

December milling wheat on the Paris-based Euronext exchange, was up 0.25 euro or 0.1 percent at 161.75 euros a tonne at 1601 GMT. Only 11,300 lots, representing 565,000 tonnes, had been traded on all deliveries around that time.

CME Group's December EU wheat contract was up 0.75 euro or 0.4 percent at 164.25 euros a tonne with about 1,500 lots or 75,000 tonnes changing hands.

"There is some support due to the global context with the (harvest) problems in Australia but in Europe, mainly in France, we are left out because we are just not competitive on the export market," a trader said.

The subdued trading in futures reflected quiet physical activity in France, marked by limited selling by producers and modest export volumes.

Port data showed a pickup in loadings at French ports, with four shipments due to load for Algeria, but overall export demand remained slow in light of this summer's poor French harvest, traders said.

German cash market premiums in Hamburg were marked down to compensate for the overnight rise in Paris with export demand thin.

Standard wheat with 12 percent protein content for October delivery in Hamburg was offered for sale at 1.5 euros over the Paris December contract against 2 euros over on Tuesday. Buyers were seeking 0.5 euro over Paris.

"The export outlook for Germany is not promising with our big customer Iran hardly buying after a good crop and Algeria getting cheaper supplies from Poland and the Baltic States," one German trader said.

"We could see more market weakness in coming weeks unless the export sector becomes more active," he said. "There was purchase interest today from north German flour mills for January/March 2017 delivery, with more willingness to sell by farmers and local traders."

Some larger north German mills appear to have almost complete supply cover for the rest of 2016, he said.

agweek

Readers choice: TOP-5 articles of the month by UkrAgroConsult