Benelux feed grain prices will keep falling in the coming weeks, reflecting generally weak European prices unless the European Commission decides to revive wheat exports subsidies, traders said on Monday. They said market activity had slowed substantially ahead of the end-year holidays and a move by Brussels to counter the impact of a strong euro and huge European harvests.
"Wheat prices will keep falling further until there is a decision on export subsidies. If they decide not to revive subsidies, prices will plunge," a Belgian trader said.
Feed wheat prices lost one euro per tonne in the Netherlands last week and December shipments traded at 109.5 euros cif Dutch ports, while prices fell one to two euros per tonne in Belgium to 106.5 ex-truck for January delivery.
Barley prices were stable to slightly lower over the past week with only small amounts changing hands.
France has been pushing the European commission to revive politically sensitive wheat export subsidies to kick start a sluggish shipment season.
Traders said feed makers in the Netherlands were well covered for January but refrained from buying medium and longer-term positions hoping for further weakness in prices.
"They still have a lot to buy next year, so from February onwards we could see huge demand for wheat. And wheat is cheap compared with barley and maize," a Dutch trader said.
"The cereals input into animal feed ratios has risen to some 35-40 percent in the Netherlands this year from a usual 13-15 percent some 10 years ago. Grains consumption has been on the rise," he added.
Traders said the Netherlands was most likely to import UK wheat next year but did not rule out purchases of Hungarian grains if low Rhine water levels and high shipping freight rates improved in the coming months.
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