Wheat Futures Prices in EU High than Chicago Wheat Market

Wheat futures prices in Europe weakened on Thursday amid thin volume on signs prices were still too high to win export business and with lower prices in Chicago also weighing on the market, traders said.

* ?The market resists when one takes into account the lack of competitiveness of European wheat worldwide,? a trader said.

* ?On top of the strong competition from the Black Sea region, European wheat now needs to deal with increased competition from South America,? he added.

* By 1252 GMT, front-month January was 1.00 euro, or 0.54 percent lower at 185.50 euros ($250.98) a tonne, returning to levels seen on Tuesday, but still stuck in the 180-190 euro range in which it has moved for the past few months.

* Volume was unusually light with just 2,170 lots traded.

* France lost out in a tender on Wednesday by Algeria, normally its top client, for between 400,000 to 500,000 tonnes of wheat thought likely to have come from South America.

* Traders expected Saudi Arabia would chose Australian wheat in its upcoming tender to purchase 275,000 tonnes of wheat, as less good quality wheat is available in Russia and Kazakhstan is struggling with logistics.

* Chicago wheat and corn slid for a second straight session on Thursday, weighed down by signs of increasing global supply and broad-based losses on global commodities and stock markets amid concerns over the European Union?s debt crisis.

SPAIN

Spanish physical wheat was firmer due to lack of volume in a market depressed by the continuing economic crisis and with market players sitting on the sidelines in the hope of fresh arrivals of Ukrainian wheat in the New Year.

Traders said many sellers had reached deals for January to March delivery, by when Brussels is due to hold an auction for permits to import wheat under the tariff-rate quota (TRQ) scheme.

Prompt feed wheat in leading grains port Tarragona ? a benchmark in import-dependent Spain ? was quoted at 205-209 euros/tonne, up 2-3 euros from Monday.

?There is a lot of uncertainty. We don?t know where we?ll end up with so much discouragement due to lack of sales, the economic crisis, because millers as well as feed makers are losing money,? a dealer said.

?Small deals only are being settled, because buyers don?t want to step in at these prices. They prefer to wait.?

GERMANY

* In Germany, prices were weaker in line with the Paris market.

* Standard new crop bread-quality wheat for January delivery in Hamburg was quoted down one euro at around 193 euros.

* Hamburg selling prices remained above Paris on continued belief 2012 supplies will be tight following this summer?s disappointing German crop.

* ?There is little selling interest visible today in many regions with farmers and local traders not happy about the present low level of prices and holding out for better times,? one trader said.

* Low water levels on the river Rhine and Danube were disrupting deliveries of past contracts.

* ?Some Rhine freight rates have doubled because of the low water and cargo is being transferred to truck transport,? another trader said. ?Mills and feed makers are also trying to re-source material closer to their locations.?

* ?Some traders are also trying to negotiate delays of past contracts. The Rhine is so low that very substantial rain will be needed to raise water to normal levels and this is not in sight.?

* River catchment areas in Germany and Switzerland are forecast to be mainly dry up to Sunday.

* Prices at 1252 GMT



Product Last Change Pct Move End 2010 Ytd Pct

Paris wheat 185.50 -1.00 -0.54 252.50 -26.53

London wheat 150.50 -1.55 -1.02 199.00 -24.37

Paris maize 185.75 -0.75 -0.40 235.00 -20.96

Paris rape 430.50 -0.75 -0.17 497.25 -13.42

CBOT wheat 613.75 -3.00 -0.49 794.25 -22.73

CBOT corn 637.50 -5.25 -0.82 629.00 1.35

CBOT soybeans 1184.50 -3.25 -0.27 1393.75 -15.01

Crude oil 109.36 -2.52 -2.25 91.38 19.68

Euro/dlr 1.35 -0.02 -1.55 1.34 0.78

* Paris futures prices in Euros per tonne, London wheat in

pounds per tonne and CBOT in cents per bushel.

($1 = 0.739 Euros)