Western European wheat markets were mostly subdued on Monday as demand was light and operators cautious ahead of a closely watched supply and demand report from the US government. "The market is going to remain very prudent before Tuesday's USDA report," a futures broker said, referring to the US Department of Agriculture's monthly world report on supply and demand for agricultural commodities, due at 1330 GMT on Tuesday.
Wheat futures in Paris outperformed other EU markets, however, as Chicago wheat turned higher on weather concerns and as the looming expiry of November contracts also pushed up Paris prices, traders said. Some operators urgently needing physical supply had resorted to bidding on Euronext for November futures that expire on Wednesday.
"The recent strikes (over pension reform in France) have disrupted deliveries and some operators are being forced to buy November contracts at a time when there are very few sellers," another futures broker said. Benchmark January milling wheat closed up 1.25 euros at 222.50 euros a tonne. Next resistance put at 225-225.50 euros. November surged 1.75 euros to 230.00 euros.
Rapeseed futures in Paris hit fresh contract highs, putting front-month prices at more than two-year highs in line with a general surge in vegetable oils that has brought two-year highs in US, Malaysian and Chinese markets.
PRE-HOLIDAY LULL IN MADRID Germany's market was little changed, with support coming from the weakening euro and the rise in Paris wheat futures in Monday trade, but low demand also weighing ahead of the USDA report on Tuesday. Standard bread-quality wheat for November delivery in Hamburg was offered for sale unchanged at 222 euros a tonne with buyers at 220 euros. "The weakening euro was good news as the euro over $1.40 would be poisonous for export pricing at a critical period when Argentine and Australian crops are starting to be offered on the market," one German trader said.
Germany, Argentina and Australia compete strongly for high-quality wheat sales. Southern hemisphere crops get offered strongly on global markets from late November to early December. "Weak domestic demand is also coming from flour mills, which are said to have pretty good supply cover until the end of this year," one trader said. Wheat in major importer Spain has posted mild gains in recent days to line up with Paris, but volume was thin as many consumers have order books full until the end of the year and await direction from key international markets.
Monday was particularly quiet as many traders in Madrid had taken the day off ahead of a public holiday in the capital on Tuesday. Prompt imported feed wheat quoted at 210/211 euros/tonne in leading grain port Tarragona, up 2-3 euros from a week ago, and January-March feed offered at 217 euros, but with few takers.
Milling wheat in northern industrial town Lerida, a market benchmark, was quoted up 3 euros on the week to 211 euros/tonne. Dealers said French wheat, which is traditionally imported by road, was losing ground to domestic new crop. "Every one is waiting to see if prices rise, because the market is firm, because futures won't give way, because funds have historically long positions in Chicago, or because the US monetary injection weakens the dollar and drives investors to commodities," said a report from the Mercolleida agricultural exchange.
Italian soft wheat prices were little changed around the levels seen at the end of last week with sellers reluctant to lower prices despite weak demand, traders said. Milling wheat was stable in a wide range of 220-250 euros a tonne, depending on quality, ex-gate for prompt delivery in northern regions, they said.
Comments
Comments are closed.