EU Wheat Prices Bounce On Outside Markets

EU wheat futures closed modestly higher Friday in a technical bounce from recent steep losses as outside markets rose, buoyed by the news that the US Treasury and Federal Reserve were working on a plan to rescue the ailing financial markets.

Crude for October delivery rose more than $6/barrel to close at $104.55/barrel.

Paris November milling wheat closed up EUR2.00 at EUR170.00/tonne and London November feed wheat ended up GBP0.75 at GBP106.50/tonne.

Trading was thin and volume low, with the cash market particularly slow as operators waited for commodities to stabilise following this week's extreme volatility.

Nevertheless, traders stressed that fundamentals remained bearish, with some predicting the expected rally in Chicago will be short-lived.

Strategie Grains this week raised its estimate for the 2008 EU soft wheat crop by 3.7 million tonnes to 137.6 million.

Meanwhile Toepfer raised its 2008 EU soft wheat production forecast to 139.4 million tonnes, up 4.2 million tonnes from its August forecast of 135.2 million tons, and up 25% on the year.