European Union wheat futures prices eased on Thursday, while cash markets were steady, and the German market waited for news of the first EU intervention sales. German trade was quiet ahead of the first sales on Thursday of 350,000 tonnes of German intervention wheat for use in the EU domestic market.
"The market is almost at a standstill because buyers are absent, awaiting the outcome of the first awards later today," one trader said. "I think business in the German market will be kept very quiet in the coming weeks until the internal market tenders are over, although I also think it likely that the EU may increase the volume beyond the first 350,000 tonnes."
German bidding in the first tender was brisk, with a total 792,089 tonnes bids submitted, but bids for only 284,594 tonnes accepted. When several bids are made for grain in the same store, the lowest bid is passed to Brussels.
"As the wheat was being sold in small lots there was obviously a lot of interest among small consumers," one trader said. "But you have to remember that it can also be exported to third countries and I think a lot of exporters also bid." "If companies have export licences they can sell it where they like, but they do not get the inland transport costs paid."
German wheat prices were firm against the generally strong international background but some prices were nominal because of thin trade. Standard bread wheat for November delivery was offered for sale in Hamburg up two euros on the day at around 155-156 euros a tonne. "But trade is so thin I read very little into it," a dealer said.
FRENCH CASH PRICES STEADY: French wheat was stable on the cash market on Thursday, as traders waited for the outcome of Tunisia's wheat tender. On the futures market, prices were slightly lower in line with Chicago. Tunisia bought 160,000 tonnes of milling wheat, of optional origin, at $227 a tonne for November to January shipment.
Traders said the price appeared a bit too low to be delivered from France, given current prices on the world market. The market had already taken into account the Australian Wheat Board's further cut in its wheat crop estimates, confirmed on Thursday by the International Grain Council, traders said.
The market was also awaiting the result of intervention wheat, barley and rye resales on the domestic market in the afternoon. The move aims to limit the rally on grain markets.
"These measures should mostly benefit central European grain processors. The French remain very export-oriented", one trader said, adding prices should stay firm as long as the size of the Australian crop was still uncertain. Italian wheat eased after recent gains as buyers were reluctant to purchase grain at high prices, traders said.
"The market has calmed down, the recent upturn has stopped. People want to sell national standard wheat at 180 euros (per tonne), but they cannot find buyers," said one trader.
Italian standard bread wheat was quoted at 179-181 euros a tonne on Milan's cereals exchange on Tuesday, up 2 euros from a week ago. National maize sales were almost halted by deliveries of Hungarian grain bought previously at 135-150 euros per tonne. "Some sellers want 170 euros a tonne for national maize, but there are no buyers because the Hungarian maize is arriving and people resell it," the trader said. In Spain feed wheat was priced at 170-172 euros a tonne in ports around the country, unchanged from Wednesday.