Euro traders hold out for futures market

By FWi Staff

THE European grain market is still quiet, with a lack of physical selling forcing traders to hedge on the futures market instead. The varying quality of wheat in the market has lead to huge price differentials between high quality milling wheat and feed wheat prices.

The European spring malting barley harvest is progressing in northern Europe, with Sweden reputed to have harvested 30% and Denmark 50%. Results so far indicate a reasonable quality. There was some market support last week, as Hungary reportedly purchased some French Esterel, while Turkey bought a 25,000 tonne mix of spring barley and UK Regina.

Strategie Grains, the French analysts, have forecast EU 2000/01 cereal production up 6% on 1999/00 to 210m tonnes. Of this, the soft wheat harvest is up by 8% to 95.9m tonnes, while barley is some 3% higher at 49.5m tonnes.

Champagne Cereales, the largest French wheat co-op, believes that this years wheat crop will be close to the poor quality seen in 1987. Estimates suggest up to 50% of the soft crop will have to be sold as animal feed, compared with 33% last season.

Germany is seeing better yields and quality in the late harvest areas following much improved weather. There is some activity in the wheat market but the feed barley market is very quiet. Higher priced bread grains have pushed flour and bread prices higher.

Denmarks harvest suffered delays last week due to rain although it is not thought to have affected the quality. Harvest is expected to finish this week.