Monday, 30 March 2015 21:21
PARIS: European wheat futures rose on Monday, supported by a rise on US markets where concern is mounting that dry weather in parts of US grain belt may curb yields of the hard red winter crop.
May milling wheat, the benchmark on Euronext’s main No. 2 wheat contract, was 1.5 percent higher at 191.50 euros a tonne by 1557 GMT.
In Chicago May wheat was 3.8 percent higher at $ 5.27 a bushel.
The market is also eyeing the USDA’s prospective plantings report on Tuesday, which is likely to show farmers in the United States boosting soybean sowings at the expense of corn acres this spring, a Reuters poll showed.
“It’s clearly the US market that set the tone today with position covering ahead of Tuesday’s report and an uncertainty premium due to the lack of rain in some areas of the US Plains,” a Euronext trader said.
“This allowed the return of some volatility on Euronext, which has been lacking some for a long time.”
The European Commission lowered its forecast for soft wheat stocks at the end of the 2015/2016 season due to higher consumption by animal feed makers who would also use less maize than initially estimated.
In Russia, major grain traders are delaying signing forward deals for new crop wheat, usually set at this time of the season, due to the risk that a wheat export tax could be extended, exporters and analysts said.
GERMANY
German cash wheat premiums in Hamburg were weaker in thin demand despite a brisk German wheat export programme.
Standard wheat with 12 percent protein content for delivery in Hamburg in April was offered for sale at level the Paris May contract against 1 euro over on Friday. Buyers were offering 1 euro under Paris.
“There is a noticeable lack of demand today with market participants holding back ahead of the important USDA sowings forecasts for the United States to be published on Tuesday,” one German trader said.
“Concern is growing that the large port wheat export programme could restrict the time window available for new export sales if loading delays drag on into April,” he said, pointing to repeated talk of delays to ship loading because of large volumes.
“Low oil prices could also restrict purchasing by the main Middle Eastern importers in coming weeks.”
Copyright Reuters, 2015
