Monday, 8 May 2017

EU wheat prices rebound from one-week low

In Commodity News 08/05/2017

Euronext wheat futures rose on Friday after a two-day fall stirred buying interest, while higher U.S. prices and persisting weather risks also lent support.
December milling wheat on the Paris-based Euronext exchange was up 1.50 euros, or 0.9 percent, at 173.00 euros a tonne by 1630 GMT, recovering from a one-week low of 171.00 euros hit earlier in the session.
“With Euronext approaching chart support levels, feed makers, millers and cooperatives have resumed buying at what they see as attractive prices,” a futures dealer said.
“The weather risk remains in France although the rain this week has brought some relief to crops.”
The condition of French wheat declined for a fourth consecutive week, with 74 percent of crops rated good or excellent as of May 1 against 78 percent a week earlier, farm office FranceAgriMer said on Friday.
Dry weather since winter plus frost in late April have created concern about crop stress, although rain and milder temperatures have returned to much of France this week.
Firm demand on the domestic market in France was also lending support to Euronext, with export activity cooled by the strength in the euro.
Feed wheat futures in London were also higher with November up 1.00 pound, or 0.7 percent, at 140.50 pounds a tonne.
“Today’s price make up in the UK is now solidly capped to the upside,” Frontier Agriculture said in a market note.
“Weather markets are notoriously fickle and price rallies always take a lot of power to sustain when global positioning of wheat is stacked towards betting on the bearish side of the market as is currently the case.”
In Germany, cash market selling premiums in Hamburg were firm to compensate for the overnight fall in Paris, with German prices again underpinned by strong feed wheat demand.
Standard wheat with 12 percent protein content for May delivery in Hamburg was offered for sale up 1 euro at 7 euros over the Paris May contract, buyers were seeking 5 euros over.
“Good internal market demand, especially from the animal feed sector, is supporting in the face of a poor export outlook,” one German trader said.
More rain is also forecast in Germany in coming days, which is welcome for crops after a dry April.

Source: Reuters (Reporting by Nigel Hunt in London, Valerie Parent in Paris and Michael Hogan in Hamburg; Editing by Mark Potter)