GRAINS-U.S. wheat futures flat, weak dollar stems fall

Fri Nov 11, 2011 12:17pm GMT
 

* U.S. wheat, corn prices weighed by weak exports
    * Public holiday in France slows European trade
    * U.S. feed maker signs deal to buy U.K. feed wheat

 (Updates prices, adds comments, previous Sydney)	
    By Nigel Hunt	
    LONDON, Nov 11 (Reuters) - U.S. wheat and corn futures
were mostly flat on Friday, consolidating after the prior
session's setbacks driven by weak U.S. export sales and the
fallout from Europe's debt crisis.	
    Dealers said a weaker dollar underpinned U.S. prices
on Friday but ongoing concerns about the euro zone crisis were
helping to keep gains in check.	
    Chicago Board of Trade (CBOT) wheat for December delivery
 were unchanged at $6.20 per bushel at 1200 GMT. The prior
session it had slid 3.6 percent tumble, the biggest single-day
fall in a month.    	
    "U.S. wheat remains too expensive on the global market, a
fact confirmed once again by the latest Egyptian tender
results," said Luke Mathews, an agricultural commodities
strategist at Commonwealth Bank of Australia.        	
   USDA on Thursday reported U.S. wheat exports last week
totaled 298,400 tonnes, below trader estimates that reached
450,000 tonnes.	
    Egypt bought 240,000 tonnes of Ukrainian and Russian wheat
on Thursday at around $265 per tonne, cost including freight
(CIF). U.S. suppliers didn't bother to compete.	
    In South-East Asian markets, U.S. wheat is also
uncompetitive. Soft white wheat shipped from Pacific North-West
ports is around $20 per tonne more expensive than Australian
Standard White milling wheat in key markets such as Indonesia.	
    European Union wheat exports have been healthier, buoyed
partly by the weakness of the euro.	
    The EU this week granted export licences for 502,000 tonnes
of soft wheat, taking the total since the beginning of the
2011/12 (July-June) season to 5.54 million tonnes, official data
showed. 	
    "The lower price levels (for EU wheat) seems to be
attracting wheat buyers...Over 1 million tons of wheat has been
released for export in the past two weeks which is considerably
more than in the weeks before," Commerzbank said in a market
note.	
    "We expect the price to rise to 200 euros a ton by the end
of the year," the report added.	
    January milling wheat in Paris eased 0.25 euros or
0.1 percent to 185.75 euros a tonne. Volume in Paris was
curtailed by the closure of many offices for Armistice Day.	
    "The market is quiet today because of the public holiday in
France," one European trader said. "Although Paris wheat prices
are stable this morning you might not be able to read much into
it because of thin market participation."	
    	
    WEAK CORN SALES	
    CBOT corn for December delivery edged up 0.2 percent
to $6.46-3/4 a bushel, clawing back some of Thursday's losses.	
    "Basically, people are taking advantage of the sell-off (to
buy at lower levels)," said Jonathan Barratt, head of
Sydney-based Commodity Brokering Services.	
    U.S. corn exports last week also disappointed, with sales
totaling 251,800 tonnes, below estimates ranging from 550,000 to
750,000 tonnes.	
    Dealers noted the premium for corn was prompting some animal
feed makers to switch to using wheat.	
    UK grain merchant Openfield said on Friday it had signed a
major contract to supply feed wheat to the United States with
the first shipment due for loading next week.	
    Britain's largest grain farmer co-operative said the
approach from a major U.S. feed compounder followed a dramatic
rise in their domestic corn prices. 	
    Soybeans for January delivery advanced 0.5 percent to
$11.73-1/2 per bushel, propped up by continuing importer
interest in U.S. beans despite big South American supplies
competing for global market share after bumper harvests.	
    EU rapeseed futures were also edged higher with February
 up 0.1 percent at 427.50 euros a tonne.	
    "Oilseed market fundamentals generally remain positive with
good underlying demand although short-term crush margins look
poor and European rapeseed prices are possibly at the top end of
their range for the time being," Jonathan Lane, trading manager
with UK merchant Gleadell said in a note on Friday.	
	
 (Additional reporting by Bruce Hextall and Michael Hogan)

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