European wheat futures fell on Monday following a drop on US markets but volumes were thin as the market awaited activity in Chicago later in the day. Spread trading between front-month March which expires next week and new benchmark May was concentrating most of the volumes on the European milling wheat futures. By 1303 GMT, May was down 0.7 percent or 1.75 euros at 238.00 euros a tonne, while March was off 0.50 euro at 249.50 euros a tonne.
"The fall on May is arbitrage with Chicago," a European trader said. A storm was forecast to hit the north central United States, dumping 4 to 8 inches (10 to 20 cm) of snow from North Dakota to northern Iowa and Illinois on Monday, the National Weather Service said.
Traders noted that the rare Saudi wheat purchase over the weekend, for 465,000 tonnes of hard wheat and 110,000 tonnes of soft wheat for delivery between June-August, was a new sign of hefty international demand. A fall in Russia's domestic wheat prices, down for a fifth week last week, is expected to slow in March due to reviving demand, analysts said. Traders were also awaiting a US government world supply and demand report later in the week.
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