July 16, 2012 / 1:08 PM / 7 years ago

EU wheat surges on weather woes, rapeseed at new high

LONDON, July 16 (Reuters) - Wheat prices in western Europe rose sharply on Monday while rapeseed futures in Paris hit an all-time high as weather woes, most notably in the United States and the Black Sea region, fuelled buying.

* “We are seeing everywhere the reverse from what we should be seeing,” a trader said, referring to the adverse weather conditions seen in many parts of the world.

* Benchmark November milling wheat was up 2.8 percent at 266.00 euros a tonne at 1225 GMT after earlier setting a contract high of 267.50 euros.

* “Helped by a euro in the doldrums, Euronext wheat breached the highest level seen during the previous season and eyes are now turned towards the historic levels seen in the 2010-2011 and 2007-2008 seasons as bad news on production levels stack up,” French analyst Agritel said in a weekly newsletter.

* U.S. corn prices surged by more than 4 percent on Monday while soybeans also posted strong gains as crops in the key Midwest growing region deteriorated and forecasts indicated there was little relief in sight from the worst drought since 1988.

* Front-month rapeseed contract rose by 1.5 percent to hit an all-time high of 525.00 euros per tonne, breaching the previous record of 521.75 euros set at the end of 2010.

* Rainy weather in France in the past two weeks remains a worry for farmers especially for grains that are now mature. Weather forecasters predict that a return of drier conditions should be short-lived.

* “There may be good yields in the fields but the question now is how much can enter in the food chain,” FCStone said in a note. “The entire northwestern block of northern France is suffering massive disease pressure,” it added.

* On the export front, the two barley shipments for Saudi Arabia are currently being loaded at La Pallice and Rouen, the first in a series of shipments.

* The outlook for yields in Britain continued to deteriorate with some fields waterlogged and disease levels high.

* November feed wheat rose 5.00 pounds or 2.7 percent to a contract high of 193.00 pounds a tonne.

* Dealers said physical trade was slow as producers wait for a clearer picture on crop prospects before making further sales.

* In Germany, prices again took big jumps upwards as Paris set contract highs, with no improvement expected in German weather this week at a time when wheat needs sun.

* Standard milling wheat for September delivery in Hamburg was offered for sale up 6 euros at 271 euros a tonne, with buyers at around 269 euros.

* “The market is now increasingly concerned about the rain in West Europe along with the weather problems in the U.S. Midwest and Russia,” one German trader said. “A wet weekend in Germany means hardly any progress was made on Germany’s barley harvest and wheat is now receiving too much water.”

* “There is almost a mood of panic in some parts of the EU market. Sales prospects for EU wheat are looking ever better and there is growing worry the wet weather will cut quality. If there are harvest problems in France and the UK this could move export demand to Germany for both milling and feed wheat.”

* Another trader commented: “We are now facing a later start to the wheat harvest in Germany than previously expected. But it must be stressed that German wheat still has time to recover and ripen if we get a good dose of sunshine.”

* But no immediate improvement is in sight. Widespread rain and overcast skies are forecast for much of Germany from Monday to Friday.

* The weaker euro also supported.

* “We are seeing bad news come out of Russia every day and Monday was no exception, with forecasts of lower exports in coming months,” the second trader said. “The lower euro is likely to significantly improve Germany’s export outlook.”

* “It looks like Russia will not make a surge into wheat export markets in the same style as we have seen in recent seasons. Export demand for German and other EU wheat looks set to be much stronger than people had expected a couple of weeks ago.” (Reporting by Nigel Hunt in London, Valerie Parent in Paris and Michael Hogan in Hamburg; editing by James Jukwey)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below