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LONDON: Wheat prices in western Europe edged up on Tuesday, tracking a broad-based bounce in commodity and many other financial markets although gains were capped by ongoing concerns about US and euro zone debt.
“The uncertainty in the background macro economic picture is burdening the mood in the cash market today,” one German trader said. “There is very little purchase interest in some regions which is keeping prices rangebound.”
Benchmark January milling wheat in Paris was 1.25 euro or 0.7 per cent higher by 1237 GMT at 181.25 euros a ton.
The contract dipped a low of 179.00 euros on Monday.
Traders noted that the benchmark contract had come back within the 180-190 range it has been hovering within since September after breaking in intraday trade on Monday.
“We are correcting yesterday’s excess but in very light volume,” one trader said.
Stock markets put in modest gains on Tuesday after a heavy session of losses the previous day, though the respite from worries over US and European government debt looked only temporary.
January feed wheat futures in London rose 1.30 pounds or 0.9 per cent to 144.50 pounds a ton.
Tough competition in export markets from the Black Sea region remained a bearish influence.
“The export prospects are not good and the main grain tender business is expected to go to Russia, Ukraine and Kazakhstan in coming weeks,” one trader said.
“With such heavy export pressure coming from the Black Sea, it is doubtful whether even a very sharp fall in the euro will tip the scales in west Europe’s favour,” the trader added.
Algeria’s state grain agency OAIC has issued a tender to buy a nominal 50,000 tons of optional origin durum wheat for January shipment, European traders said.
Traders said they expected French durum bids in the Algerian tender to be mainly challenged by Canadian origins although winter shipments are be more difficult for the North American country.
Standard new crop bread-quality wheat for January delivery in Hamburg was offered for sale little changed from late Monday levels at around 187-186 euros a ton with buyers seeking around 184 euros.
November delivery wheat in Hamburg was at 190 euros a ton, remaining more expensive than January after some short covering by exporters in past weeks. But hardly any buying interest was now visible for November delivery, dealers said.
European rapeseed futures were also slightly higher with February up 0.2 per cent at 416.50 euros a ton.
Some traders said rapeseed prices were supported by a rebound in crude oil futures and continued strong demand in the vegetable oil market.—Reuters
