There was cause to think wheat prices might rise in Europe, even in the absence of an
influence from Chicago markets, with Ukraine troubles appearing only to get
Petro Poroshenko, the Ukrainian president, accused Russia of
"direct and unconcealed aggression" against his country as Ukrainian troops lost
further ground to separatist forces.
Valery Heletey, Ukraine's defence minister, went even
further, saying that "a great war has arrived at our doorstep - the likes of
which Europe has not seen since World War Two.
"Unfortunately, the losses in such a war will be
measured not in the hundreds but thousands and tens of thousands."
Wheat prices have been acting somewhat as a barometer for
Russia-Ukraine tensions, given the region's status as a large source of
competitively priced supplies.
'Competition from the
As an extra boost to wheat prices in Paris, the euro continued its gentle decline, dropping
to E1.312 to $1 at one point, its lowest in nigh on a year against the
A weak currency makes eurozone exports, such as grain, less
expensive to buyers in other currencies.
"The euro remains on a downward path and provides support to
the wheat price from Europe thanks to a better competitiveness on the world
stage," Agritel, the Paris-based consultancy said.
"However there is a competition with the wheat from the
Black Sea area."
In fact, wheat is being offered at the French port of Rouen
at E174 a tonne, less than $230 a tonne, but that is for 11% protein supplies.
Buyers appear keener on the 12.5% protein supplies offered
from Russia, whose exports are soaring, allowing prices to rise a touch, by
$1.50 last week to $247.50 a tonne, according to SovEcon.
"The price growth is supported by domestic and export
demand," the analysis group said.
Ikar quoted Black Sea prices for 12.5% protein wheat at $244
a tonne, up $1 a tonne, week on week.
Whatever, the ideas is the same.
And farm giant Ros
Agro highlighted where domestic demand might be needed as it unveiled a jump in
meat profits, backed by higher pork production and volumes, and unveiled
further expansion plans.
The trouble with lower quality supplies is that there are
plenty of them, a factor which many investors believe, for instance, bodes ill
for the feed grain traded in London.
"UK feed wheat is still uncompetitive against competing
exporters into most destinations, although the odd small cargo has been sold
across to Ireland in the last couple of weeks," traders at a major European
commodities house said.
"Recent business from the Ukraine suggests that UK prices
would have to be close to £100 a tonne ex-farm to gain any business in the
However for now, "very little is being sold from the farm
and that is holding prices well above this level".
London November feed wheat closed down 0.2% at £121.55 ($202)
a tonne in London.
Paris feed wheat for November dropped 0.4% to E176.25 ($231)
a tonne, on trade thinned by the closure of US markets for Labor Day.
'Struggling to buy
too, although less severely, by 0.1% to E323.50 a tonne in Paris for November delivery,
offered some support by a firm spot European cash market.
"Crushers are running close to capacity at present and
merchants are struggling to buy seed to cover earlier sales" of processing
products, the commodities house said.
"Therefore prices close to the November value are available
at the moment and may remain for a week or two."
Elsewhere in the commodities complex, soybeans managed to close flat at 4,591 yuan a tonne on the Dalian exchange
in China, the top importing country of the oilseed.
Coffee hots up
It took something more solid in data terms, to give investors
the confidence to take prices significantly higher, which they did in
London-traded robusta coffee.
The best-traded November contract jumped 1.3% to $2,081 a
tonne, its third best finish in the past three months, and extending a recovery
from a low of $1,928 a tonne reached two months ago.
The catalyst was another month of poor weak exports from
Indonesia's main coffee growing region, Sumatra, down 32% in August to 21,986
tonnes, government trade data on Monday showed.
The region's cumulative exports are down 49% in 2014 so far,
boding ill for supplies of the bean, given that Indonesia is, the third-ranked
robusta producer, after Vietnam and Brazil, although poor weather has caused a
succession of harvest downgrades.
Elsewhere among soft commodities, cocoa for December dropped 0.4% to £2,009 a tonne, undermined by
the International Cocoa Organization's improved supply estimate, unveiled late