EU wheat mixed

Western European wheat prices were mixed on Tuesday as a sharp rebound in Chicago pushed futures higher while heavy supplies and lacklustre demand kept cash markets weak. The Chicago Board of Trade saw a surge in early US trade, fuelled by short-covering after recent lows and fears that forecast frost for next week in the US Midwest could hurt late-developing spring crops.
The spectacular bounce in Chicago drove milling wheat futures in Paris higher and off fresh contract lows, but operators said the general trend remained bearish. "We are following the (CBOT) movement but we don't have any real reason to rise," one Euronext dealer said.
Operators said Egypt's purchase of Russian wheat only in its latest tender was a major disappointment given the gap between the best French bid and the actual sale price was much less than usual at only $3 a tonne, cost and freight. The results led French traders to wonder if Egypt was seeking to rebalance the origins of its purchases after buying a large amount of French wheat since the start of the season.
"If that's the case then we're in for more pain," one said. November milling wheat on Euronext closed up 2.00 euros or 1.68 percent at 121.25 euros a tonne, rebounding from a contract low of 118.50 euros earlier in the session. Feed wheat futures in London also ended higher, with the November contract up 1.25 pounds or 1.36 percent at 93.00 pounds a tonne.
Germany's market was again weaker, with the large harvest continuing to burden and the euro remaining at levels, which will depress export sales, traders said. New crop standard bread wheat for September delivery in Hamburg was quoted down one euro at 120 euros a tonne. "The big supplies looming in the EU and the rest of the world continue to create a bearish atmosphere in the market," one German trader said.
"Unless French prices recover quickly people will start talking about intervention this season as a possibility." Spanish wheat has breached resistance at 130 euros after several weeks of combined pressure from weak demand, hefty imports and harvest pressure on world markets. Prompt feed wheat was quoted in import-hungry Spain's busiest grain port, Tarragona, at 127-130 euros a tonne, down about 3 euros from a week ago.
Dealers said wheat was weighed down by maize, back in demand from animal feed makers after falls in French new-crop prices. Trading volume in wheat, however, remained small.
"The drop in port prices for feed wheat has allowed buyers to pick up small amounts to finish covering needs until the end of the year, while beginning to buy January positions," a report from the Mercolleida agricultural exchange said. "Consumers are in no hurry to close (New Year) deals, however, until current prices are seen bottoming out." Benelux feed wheat prices were little changed, with trade subdued as well-covered buyers lacked interest, dealers said.
Feed wheat for October/December shipment was quoted at 119 euros a tonne cif Dutch ports, while January/June was quoted at 122 euros a tonne. "Buyers are well covered until the middle of next month and are also playing wait and see," said one dealer. "There is still downward price potential, with no fundamental news indicating otherwise at the moment," he added.