EU Wheat Closes Slightly Firmer
EU wheat futures closed with modest gains Friday in a quiet low-volume session. May Paris milling wheat traded up EUR0.75 at EUR137.00/tonne, and May London feed wheat traded up GBP0.90 to GBP109.40/tonne.
The market continues to trade is a sideways range. A weak dollar, and stronger euro and sterling, plus the ever-present burdensome old-crop stocks capping any attempts at a rally.
Export interest remains relatively light, or at least the big headline-grabbing orders don't seem to be coming our way. Saudi Arabia bought 495,000mt of mostly Canadian wheat at the beginning of the week, although some German wheat also got a look in.
In the UK of course, much of our surplus wheat is only feed grade, and in many cases sub-standard feed grade at that. This quality is getting steadily exported off the radar screens.
All the while farmers are reluctant sellers given the large disparity between old and new crop prices. The May/Nov spread finished at GBP10.10 on Friday, that's almost a GBP1.70/month premium for carrying wheat into new crop. It is interesting to note that Paris milling wheat is offering only a more modest EUR7 carry.
It seems that current prices are actively encouraging farmers to carry old crop into new, but have they got the storage? It's a good question, but we did manage to bring a 17.4mmt harvest in 2008, and are looking at something around 3.4 million tonnes less this season.
Ensus confirmed this week that their new bioethanol facility at Teeside will be up and running this summer and is expected to use 1.1 million tonnes of wheat in 2009/10. Will that be UK wheat? That's another good question, it makes a bit of a mockery of the whole "green" ethos if it isn't.
The market continues to trade is a sideways range. A weak dollar, and stronger euro and sterling, plus the ever-present burdensome old-crop stocks capping any attempts at a rally.
Export interest remains relatively light, or at least the big headline-grabbing orders don't seem to be coming our way. Saudi Arabia bought 495,000mt of mostly Canadian wheat at the beginning of the week, although some German wheat also got a look in.
In the UK of course, much of our surplus wheat is only feed grade, and in many cases sub-standard feed grade at that. This quality is getting steadily exported off the radar screens.
All the while farmers are reluctant sellers given the large disparity between old and new crop prices. The May/Nov spread finished at GBP10.10 on Friday, that's almost a GBP1.70/month premium for carrying wheat into new crop. It is interesting to note that Paris milling wheat is offering only a more modest EUR7 carry.
It seems that current prices are actively encouraging farmers to carry old crop into new, but have they got the storage? It's a good question, but we did manage to bring a 17.4mmt harvest in 2008, and are looking at something around 3.4 million tonnes less this season.
Ensus confirmed this week that their new bioethanol facility at Teeside will be up and running this summer and is expected to use 1.1 million tonnes of wheat in 2009/10. Will that be UK wheat? That's another good question, it makes a bit of a mockery of the whole "green" ethos if it isn't.
