EU Wheat Lower In Quiet Trade

EU wheat futures closed lower Friday, in quiet trade, with Paris January milling wheat futures ending down EUR2.25 at EUR133.50/tonne. London January feed wheat futures closed down GBP0.75 at GBP93.50/tonne, with just 52 lots traded all day.

The market seems to be developing a stand-off with sellers reluctant to commit to what they see as low prices, and buyers content to job along buying hand-to-mouth.

In the UK odd pockets of support keep popping up when exporters need bits and bobs of spot wheat to fill a boat. This can see spot prices up by a few pounds on a localised short-term basis for those with wheat of the right quality to sell.

Whilst export activity remains fairly brisk this will help support the market. It should be noted however that all of this is old business being fulfilled. New sales are very hard to come by with Russia the most likely candidate to drop its pants sufficiently low to get the order.

Tunisia bought 75,000mt of optional origin milling wheat and 42,000mt of durum wheat Friday. Both lots are likely to be fulfilled by either Russian or Ukraine wheat. The Philippines also bought wheat this week, taking 74,650mt of feed wheat from Glencore (probably Australian).

Egypt bought 30,000mt Russian wheat Friday at $160/tonne, $21 below the cheapest French offer and $22 below the price of US wheat. Jordan and Syria said Thursday they had also booked Russian wheat. Interestingly, Egypt had originally said it was in the market for 55,000mt wheat this week. Even at a $21/tonne discount to European wheat it was still only prepared to book 30,000mt, scaling back it's buying to see if prices would fall further.

Argentina continues to have weather problems. The Buenos Aires Cereals Exchange cut it's production forecast to 10mmt, down from 10.5mmt previously, and 16.3mmt a year ago, in its weekly crop report Friday