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Harvest Update - Monday 10th January 2005
UK Market
The wheat market in the last few weeks has been extremely quiet and
the world market has been weaker. World demand has shifted more toward
Argentine origin of late, limiting traditional suppliers like the U.S.
and France. That weakness has been seen in U.S. futures with markets
recently having set seasonal lows. A weak dollar and declining ocean
freight has also benefited the U.S.
Intervention wheat stocks in the EU are just over 3mt as of late December.
That price support will likely attract additional large quantities in
the coming months. Subsidies are necessary at this time to generate
a competitive export price, but thus far the European Commission has
not acted. The U.K. is still facing an exportable surplus of nearly
1.5mt of wheat for the balance of the year, and will be hard pressed
to maintain the export pace of this last quarter.
Milling wheat markets have been extremely quiet. Nearby values have
weakened slightly in light trade. LIFFE fortunes have likewise been
listless in directionless trade. There seems to be no real "push"
from either side of the cash market currently.
The availability of quality UK milling wheat is about the same as the
past couple months. It remains to be seen if there will be pockets of
better quality later in the season as farmers get to the back of their
barns. High protein German E wheat still commands a big premium to German
A wheat.
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