Wheat Prices in European Union Fall on Recession Fears

Wheat prices in the European Union fell today, largely tracking the global markets and U.S. grain futures.

The emotional boost from the central banks' PR machine around the world is largely over, and even if bankruptcy on a global scale has been avoided, the fundamentals underlying the problem remain, and most commodities, including wheat, continue to feel the downward pressure as a result.

In Europe, November milling wheat futures dropped by 4 euros to 143.00 euros a ton, as of 1500 GMT on the Euronext.

Wheat futures in London fell as well, as the strength of the British pound against the U.S. dollar and euro is slowing down exports from the country. Wheat exports from Britain are down a huge 42 percent from last year, as competition, along with the stronger sterling hammers the export market.

Italy also experienced a significant drop in wheat prices, as they have fallen between 5-10 euros from last week's close.

There is an abundance of wheat, and that surplus, along with weaker demand, is pushing down prices.