European Union wheat is likely to remain competitive in global export markets because of low competition from rival Black Sea countries, Germany's leading grain trading house Toepfer International said on Friday.
"The long winter continues to hinder exports from the Black Sea region," Toepfer said in a market report. "This is reflected in a further rise in international price levels."
"Until a precise picture has been gained of the exact winter damage suffered by the region this position is not likely to change."
"This means EU wheat is competitive and has been successful in tenders from Egypt and Tunisia."
But EU internal wheat markets have been relatively quiet in the last few weeks, it said. "The exception is the Netherlands and Belgium, where recently large purchases were made by the compound feed industry," it said.
The background to the quiet markets is that exporters are mainly using sales from the European Union's intervention wheat stocks to cover their needs, it said.
But the EU's policy of not subsidising exports from commercial wheat markets could mean that farmers in turn offer more wheat into intervention because of low export demand in commercial markets, Toepfer warned.
West European corn prices have fallen because of fears of bird flu, the ending of winter shipping problems on the river Danube and a too high price difference against feed wheat, it said.
"Generally there is little purchase interest and corn is being offered into intervention, especially in Hungary," it said. "So long as fears about a further spread of bird flu exist, market participants will remain cautious with purchasing."
EU feed barley prices have been unable to hold recent high prices, it said. "Despite further offers into intervention, prices in France, the UK and Germany have fallen by two to three euros a tonne."
Reasons include weak exports to third countries and rain in Spain which has reduced Spanish import demand.
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