Paris Wheat Hits 2 1/2 Year Low
EU wheat futures are under pressure again, taking their lead from tumbling US markets, with January Paris milling wheat -EUR1.25, or 1%, at EUR123.50/tonne.
In earlier trade the contract fell as low as EUR122.25/tonne, a two and a half year low for a front month contract.
Astonishingly, Paris futures are now within sight of the EUR103/tonne intervention level. Who would have thought that six months ago?
Also of note is that as at the time of writing this post, January, March and May are all priced at EUR123.50/tonne. There is no carry premium at all, which would appear to indicate that there is not a lot of optimism that things are going to be improving from a demand perspective through the first half of next year.
New crop Nov is paying around a EUR10 premium over old crop at EUR133/tonne.
Another interesting point is that the Jan/Nov spread on UK feed wheat is £16.75/tonne, considerably more than EUR10. That would suggest to me that buying the Paris Nov and selling the London Nov and locking in the exchange rate must be worth a punt?
Farmer selling, of course, remains light at current levels, and that isn't likely to change this side of Christmas.
The interesting bit will be what happens once we get into the new year?
In earlier trade the contract fell as low as EUR122.25/tonne, a two and a half year low for a front month contract.
Astonishingly, Paris futures are now within sight of the EUR103/tonne intervention level. Who would have thought that six months ago?
Also of note is that as at the time of writing this post, January, March and May are all priced at EUR123.50/tonne. There is no carry premium at all, which would appear to indicate that there is not a lot of optimism that things are going to be improving from a demand perspective through the first half of next year.
New crop Nov is paying around a EUR10 premium over old crop at EUR133/tonne.
Another interesting point is that the Jan/Nov spread on UK feed wheat is £16.75/tonne, considerably more than EUR10. That would suggest to me that buying the Paris Nov and selling the London Nov and locking in the exchange rate must be worth a punt?
Farmer selling, of course, remains light at current levels, and that isn't likely to change this side of Christmas.
The interesting bit will be what happens once we get into the new year?
