EU Wheat Futures Continue To Edge Higher

EU wheat continued to edge higher Tuesday with November Paris milling wheat ending up EUR0.50 at EUR128.25/tonne, and London November feed wheat closing up GBP1.45 at GBP104.70/tonne.

Once again a weaker pound provided a boost for UK futures in particular, but short-covering is also becoming a feature with London prices now up 15% from mid-September lows.

Consumers report a general lack of producer selling, even at these currently revised levels, which is flushing out one or two buyers. It is probably important however not to get too greedy or emotive, and keep a level head with prices now back up to more realistic levels.

Some more farmer selling appears to be in evidence at current prices, although many are still busy drilling next year's crop.

A report yesterday from the Centre for Economics and Business Research (CEBR) suggesting that UK interest rates look set to remain at 0.5% until at least 2001 appears to lend underlying support to wheat.

They forecast that the pound will fall to $1.40 and "possibly below" 1 euro, as UK interest rates remain subdued for a length period of time.