Wheat prices in western Europe were lower on Thursday, weighed down by weaker than expected quality criteria announced for the key Euronext contract and a setback in Chicago futures, reports Reuters from London.
- November milling wheat on Euronext settled 2.00 euros or 1.1 percent lower at 176.25 euros a tonne
- The contract had jumped more than 3 percent during Wednesday's session on talk that Euronext's delivery silos would set clear milling-grade standards for incoming grain
- But Thursday's announcement that the Senalia and Socomac silos would each require 220 for Hagberg falling numbers, with a tolerance down to 170, and a minimum 10.5 percent protein content, disappointed some traders
- "People are going to be able to deliver 170 for Hagberg, it's a bearish signal," one dealer said
- Importers typically require at least 200 for Hagberg numbers, a key measure of milling quality
- The silos' announcement followed confusion in the market over what quality could be traded on Euronext after heavy summer rain has threatened to leave much of the French crop on which the futures market is based could end up as animal-feed quality
- "It is an improvement as there were hardly any quality standards in reality on physical delivery from Euronext," said the purchasing head at a German flour mill. "But it is still not good enough, although it at least provides a minimum quality level."
- "As Euronext is a European contract it should also have delivery points in Germany with German standards and in other countries when local quality demands are higher than in France. This change is long overdue and is still needed despite the announcements today."
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