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European milling wheat futures were firm on
Thursday, mainly driven by short covering on the front month contract which
expires next week, and supported by strong equity markets.
* Traders short of 100 lots on the November contract need to provide a
storage certificate by Friday, which attracted heavy buying on the contract and
lead its premium over the following contracts January and March
to extend their rise to 7.00 euros and 9.00 euros respectively.
* “It’s even tighter now with a very high spread,” one trader said.
* But traders noted that the benchmark contract January , traded at
186.00 euros a tonne by 1257 GMT, remained in a range of 180 to 190 euros a
tonne, which has prevailed since the beginning of October.
* The market was awaiting a supply and demand report by the U.S. Department
of Agriculture next week, they said.
* But grains markets remained susceptible to macro-economic news and global
economic uncertainties arising from Europe’s debt crisis, they said.
* Chaos over Greece’s role in the euro zone swept financial markets on
Thursday with early losses in stocks and the euro turning to hefty gains on
hopes Athens might ditch its referendum plans.
* A surprise interest rate cut from the European Central Bank added to the
mix, boosting stocks and setting Wall Street up for more gains.
* The United Nations’ food agency said on Thursday it expected agricultural
commodity markets to remain tight with high and volatile prices despite improved
supply and weakening demand, raising its estimates of global grain output this
year.
* In Germany, the EU’s second-largest wheat producer after France, prices
rose in line with the strength in Paris with brisk demand from the feed sector
pushing feed wheat prices above milling grains in parts of the country.
* Standard new crop bread-quality wheat for January delivery in Hamburg was
offered for sale up two euros at around 193 euros a tonne with buyers at around
191 euros.
* “Demand for milling wheat remains poor with consumers apparently with good
supply cover and export demand likely to be covered by Russia and Ukraine in
coming weeks,” one German trader said.
* “Nearby prices for feed wheat are sometimes above milling wheat because of
low milling demand. Some stock holders who are worried about whether their wheat
will meet quality demands after the rainy summer are selling milling wheat as
feed wheat.”
* Feed wheat for November/December delivery in the large South Oldenburg
market in north west Germany close to the Netherlands was offered for sale at
201 euros a tonne on Thursday with buyers offering 199 euros.
* “Milling wheat for November delivery in Hamburg is quoted at around
194-196 a tonne and some people are deciding to pay a 7 euro a tonne trucking
charge and sell their milling wheat as feed in South Oldenburg,” one trader
said.
“As no improvement to the export outlook can be seen at the moment, some
players do not expect a major recovery in German cash prices in the immediate
future.”
* Czech milling wheat for November delivery was also reported to have traded
at 192 euros a tonne in Hamburg, also helping to slacken local milling demand.

Product           Last    Change   Pct Move End 2010 Ytd
Pct

Paris wheat      192.75     3.25    +1.72   252.50   -23.66
London wheat       0.00  -148.90  -100.00   199.00  -100.00
Paris maize      189.00    -1.25    -0.66   235.00   -19.57
Paris rape       425.50     4.25    +1.01   497.25   -14.43
CBOT wheat       629.50     6.00    +0.96   794.25   -20.74
CBOT corn        650.25     5.25    +0.81   629.00     3.38
CBOT soybeans   1215.50    22.00    +1.84  1393.75   -12.79
Crude oil         94.02     1.51    +1.63    91.38     2.89
Euro/dlr           1.38     0.04    +3.15     1.34     2.95
* Paris futures prices in Euros per tonne, London wheat in pounds
per tonne and CBOT in cents per bushel.

Source:Reuters Africa