Weather problems around the globe saw the US and European futures markets push wheat contracts higher overnight. Physical prices were not as keen to follow futures higher but there are signs creeping into the physical market confirming things are not as good as some punters might be trying to convince us.
European wheat futures closed at a five week high. London feed wheat was £2.50 stronger by the close with the November contract sitting at £171.75. At Paris the milling wheat contract was up €3.25 for the nearby contract which closed at €186.75 / tonne.
Black Sea milling wheat was US$3.00 higher with nearby offers hard to find.
In world trade there wasn’t a lot of new business to talk about. CBH did sell 100kt of wheat to Iraq at US$306.75 CIF. This is a little better than the market may have expected to see. Recent FOB offers out of WA have been around US$240. This may well be signalling that east coast wheat values are about to recover and move higher. This could also potentially drag Australian east coast feed grains higher in the short to midterm.
Germany has confirmed that the dry finish and stormy harvest this year has indeed hurt wheat and barley production. Wheat production at 20.45mt is only fractionally higher than the 2003 disaster of 19.6mt. Rapeseed yields are also expected to fall roughly 10%.