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Evening markets: EU and US wheat breaks floors

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Wheat fell through the $5 a bushel threshold in Chicago, and further below £100 a tonne in London, at the end of what has been a poor weak for grains.

The dollar was a part of the trouble for US commodities on Friday, soaring 1.1% against a basket of foreign currencies after better-than-expected American jobless data. A rising greenback makes US exports, including grains, less affordable.

Potentially heavy supplies were a problem on both sides of the Atlantic. Weather has looked favourable for spring crops in much of the Northern Hemisphere, with the, supposed, El Nino yet to look much of a threat to Australia's newly sown fields.

Waning hopes for Canada's crop already appear to have been factored into the mix.

'Spectacular' yields

In the US this week, the Wheat Quality Council reported stunning yields in North Dakota.

In Europe, Agritel, the French analysis group, pegged France's crop at 38.4m tonnes, thanks to record yields. In Germany, the association of faming co-operatives has added 2.8m tonnes to its estimate of domestic cereals output.

Yields in the south east of the UK are reported as "spectacular" too, according to Hugh Schryver of Glencore.

Protein factor

With global wheat supplies already strong, the grain's weak end to a soft week was of little surprise, with September wheat down 1.5% at $4.92 ¾ a tonne in Chicago at 17:45 GMT – within 2% of the 2009 low for a near-term contract.

In London, November wheat continued to tread new – low - ground after busting through £100 a tonne earlier in the week. It slipped a further £0.25 to £98.25 a tonne with January wheat also closing in on the ton-a-tonne mark, off £0.30 at £100.20 a tonne.

Better quality wheats continued to do better, amid some lingering concerns of a global crop high on quantity but not quality, with Paris's August contract adding E1.00 to E123.00 a tonne.

While protein levels, "in general, appear to be higher than last year... some big yielding crops have suffered from the dilution effect", Mr Schryver said.

Corn slides

Still at least, wheat investors were better off than holders of Chicago corn contracts on Friday.

The September lot dipped 2.11% to $3.25 ½ a bushel.

Hopes of a reduction in US acreage estimates, in a key US report due next week, have been swamped in recent days by talk of ideal growing weather, and, according to Informa Economics, record yields.

While a mostly dry weekend, with higher temperate, is forecast for key US growing areas this weekend "the hot temperatures are only forecast to be in place a few days, not long enough to cause any stress to the developing corn or bean crops", Vic Lespinasse, the GrainAnalyst.com analyst said.

Oilseeds do better

Still soybeans, at least, held their head above water, adding 2.25 cents to $11.74 a bushel.

A strong finish to Kuala Lumpur palm oil, a competitor to palm oil, helped a touch. Benchmark palm closed up 16 ringgit at 2,341 ringgit a tonne, within an ace of a seven-week high.

Europe's main vegetable oil crop, rapeseed, also made ground, adding E1.25 to E272.25 a tonne in Paris for November delivery.

By Agrimoney.com

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