EU wheat slips

Wheat prices in major west European markets slipped in late trade as a fall in Chicago wheat and bearish sentiment about heavy supplies offset spillover support from surging soybean prices, traders said. Euronext operators remained bearish about wheat in view of a bumper harvest and uncertain export demand.
"The market is holding up surprisingly well in the face of heavy fundamentals," one Euronext trader said, adding the return of some silo directors from holidays could trigger a fresh wave of selling next week, especially with storage space still tight ahead of the maize and sunseed harvests.
November wheat on Euronext was down 1 euro or 0.77 percent at 128.50 euros a tonne by 1656 GMT, but was up over the week after a bounce from last week's contract low at 125.00 euros. The European Union's authorisation of nearly 300,000 tonnes of wheat export licences this week was considered healthy, but overshadowed by the hefty supplies to be shifted this season and the strength of the euro versus the dollar.
"Like last year exports outside the EU will be vital for the 2009/10 campaign, especially as French wheat is currently priced out of north EU markets," one cash broker said. Wheat operators continued to watch the developing maize crop, which has faced a hot spell that may curb yields.
"The next 10 days are expected to be dry and hot with highs above 30 degrees Celsius," another broker said in reference to the key maize-growing region of south-west France. "This further hot spell will hurt the crops in non-irrigated zones."
Analysts are expected to cut their maize crop estimates to 15 million tonnes or lower, compared to previous forecasts of between 15 and 16 million, operators said. Feed wheat futures in London were lower, tracking losses in both Paris and Chicago. November feed wheat slipped 0.1 pounds to 100.90 pounds a tonne, turning lower in late trade after the market had rebounded strongly from last week's contract low of 95.25 pounds.
Dealers said exports remained slow and there appeared to have been a pick-up in farmer selling following the run-up in prices during the last few days. "At the moment we are not connecting with any new export business...Black Sea wheat continues to flood in to our traditional export homes, such as Spain," Frontier Agriculture said in a market report on Friday.
"It has been noticeable that farmer selling has picked up in recent days. Many are now recognising that the recent price rise is a selling opportunity, given that the problems overhanging the market have not gone away," the report added. Spanish wheat was stable after a recent rebound in step with other European markets as farmers were reluctant to part with new crop at current prices.
Dealers said trade was slow because many market players were still on holiday and some said consumers' order books were largely full until the end of the year. Imported feed wheat in key grain port Tarragona was quoted at 130-131 euros a tonne, ex-store,for prompt delivery, or unchanged since Wednesday but up from a recent dip to 127 euros.